KECOBO revokes licences of Kenyan CMOs

KECOBO says the decision to deregister the Music Copyright Society of Kenya (MCSK), the Performers Rights Society of Kenya (PRISK) and the Kenya Association of Music Producers (KAMP) follows cause letters issued to the CMOs for noncompliance of licensing conditions, specifically the breach of administrative cost limits and the diversion of royalties into an undeclared account that is not monitored by KECOBO. Several submissions were also received from rights holders in response to a KECOBO public notice that invited them to comment whether the CMOs’ licences should be renewed or revoked.

KECOBO’s board of directors says it was not satisfied with the responses to the cause letters, and has now suspended the CMOs from collection activities for the next three months. The copyright board said it would use this time to reform the legal structures for collection societies in order to prevent the misuse of funds in the future.

“In the circumstances, the board did not have any option other than to take the painful decisive action as provided by the Copyright Act,” KECOBO executive director Edward Sigei said. “The collection of royalties by these organisations, therefore, stands suspended until further notice.”

KECOBO’s board also noted a recent royalty payout where the CMOs disbursed about 36% of the 114 million Kenyan shillings ($1m) they collected at the end of July. Furthermore, PRISK and KAMP allocated Ksh4m and Ksh1.2m from their collections of Ksh10m and Ksh8m, respectively, for administrative costs. This is with regard to revenues that KECOBO has been able to monitor through the official joint account, and it is possible that there are hidden funds in bank accounts unknown to KECOBO.

“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% 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,” KECOBO chairman Mutuma Mathiu said.

The latest development adds to the imbroglio that is Kenya’s royalty collection space, and comes five months after the High Court of Kenya in Nairobi issued an order restraining KECOBO from interfering with the MCSK’s administration and enforcement processes, as well as with the collection and distribution of royalties in respect to performance and production rights.