The Kenya Copyright Board (KECOBO) has deregistered three music Collective Management Organisations (CMOs) over failure to meet licensing conditions and mismanagement of funds.
The three are Kenya Association of Music Producers (KAMP), Performers Rights Society of Kenya (PRISK) and the Music Copyright Society of Kenya (MCSK).
In a statement to newsrooms on Tuesday, KECOBO Executive Director Edward Sigei said the CMOs failed to meet conditions set out by the board in their provisional licenses in April this year and that were valid until May 30.
The guidelines included: Holding an Annual General Meeting; allocating 70% of revenue for royalty payment; engaging with Kenya Revenue Authority with a view to reaching a payment plan on tax arrears and demonstrating of evidence of marketing and promotion of the use of ICT collection system.
The CMOs were also required to upload repertoires to the system under KECOBO supervision as well as implementing the CMO policy in total.
“By the time the Board was issuing these conditions, it noted that several conditions for the 2020 license period had not been achieved,” the statement reads.
According to Sigei, the board set the conditions on the understanding that rights holders would be relying on the royalties collected by CMOs during the pandemic period.
“The decision to deregister the CMOs follows show cause letters 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,” he added.
The CMOs were further put on the spot over the recent distribution of royalties where they reportedly distributed Ksh41 million (35.9%) instead of Ksh79 million (70%) out of KSh114 million 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 Kshs. 1.2 million from their allocation of Kshs.10 million and Kshs. 8 million respectively to cater for administrative costs,” the board said.
“It should be noted that the distribution excludes money received and expensed in the other accounts out of KECOBO monitoring system. The Board, being dissatisfied with the CMOs explanation in response to show cause letters, invoked the provisions of Section 46(9) to 46(12) of the Copyright Act to deregister KAMP, PRISK and MCSK.”
Following the deregistration of the institutions, the board announced a three-month suspension of the collection of royalties pending review of CMO legal structure to prevent any misuse of funds in the future.
“The main issues flagged by the Board of Directors include the opening of a different account other than the KPM account authorised 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,” noted KECOBO Board Chair Mumma Mathiu.