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Copyright Board suspends three entities in funds row

The Kenya Copyright Board (KECOBO) has deregistered three music Collective Management Organisations (CMOs) over failure to meet licensing conditions and mismanagement of funds.

In a statement, KECOBO said the move to deregister the Kenya Association of Music Producers (KAMP), Performers Rights Society of Kenya (PRISK), and the Music Copyright Society of Kenya (MCSK) was arrived at after they failed to meet stringent conditions stipulated in the provisional licenses.

“Following the revocation of licenses, collection of royalties has been suspended for a period of three (3) months or until further advised,” the Board said.

Board Executive Director Edward Sigei said the organization’s provisional licenses issued by KECOBO were to remain valid until May 30 subject to meeting the various conditions.

They were expected to hold Annual General Meetings, allocate 70 percent of revenue for a royalty payment, engage the Kenya Revenue Authority on a payment plan on tax arrears, demonstrate evidence of marketing and promotion of the use of ICT collection system, uploading of repertoire to the system under KECOBO supervision as well as implement the CMO policy in total.

The suspension of the CMOs comes after show cause letters were issued to the CMOs for non-compliance to the licensing conditions specifically breach of administrative cost limit and diversion of royalties into an undeclared account whose operations are not monitored by KECOBO.

“During its meeting held on August 11, 2021, the Board further took note of the recent distribution of royalties where the CMOs reportedly distributed Sh41 million (35.9%) instead of Sh79 million (70%) out of Sh114 m collected at the end of July 2021 in defiance to the KECOBO license conditions. From reports of distribution from two entities received so far, PRISK allocated a further Kshs 4 million while KAMP made an allocation of Sh1.2 million from their allocation of Sh10 million and Kshs 8 million respectively to cater for administrative costs,” the Board added.

KECOBO Board Chair Mr Mutuma Mathiu said the opening of a different account other than the KPM account authorized by KECOBO, having spent more than 65 percent of the finances on administration cost contrary to directives and not undertaking their role of engaging the public and raising awareness about the KPM system were some of the issues that led to the decision.

“The Board will in conjunction with relevant ministries shortly commence the process of seeking views on reforming the CMO legal structure to prevent recurrence of the misuse of funds by CMOs. This process will hopefully be completed in three (3) months,” he said.