Big test for TBC, Star Media

THE Minister of Information, Culture, Arts and Sports, Dr Harrison Mwakyembe, has directed the Tanzania Broadcasting Corporation (TBC) board and that of Star Media Tanzania to efficiently and closely supervise the implementation of an agreement contained in the newly signed Memorandum of Understanding (MoU).

TBC Director General, Dr Ayub Rioba and Star Times Group President Xin Xing, recently put pen to paper signaling, a beginning of an agreement to run star media. The directive by Dr Mwakyembe came in response to the newly released 2016/2017 Controller and Auditor General (CAG) Report which revealed that the State Broadcaster was not benefiting from its contract with Star Media Tanzania Limited.

CAG Professor Mussa Assad noted that TBC had never received any returns from its investment with the Chinese based company, Star Communication Network Technology Limited since 2013, which defeats the intended objectives of the investment in the Company. TBC is one of the shareholders of the Star Media Tanzania Limited, holding 35 percent of the share capital and the other 65 percent are held by Star Communication Network Technology Limited. The Performance Agreement between the two partners states that, assets to be used in the project, receive tax exemption.

According to the CAG, the review of the Asset Register of 2014 for a selected sample of network equipment noted that items worth 34.4bn/- were imported and installed. However, physicalverification did not establish physical existence of these assets which were recorded in the Register as having been installed.

Furthermore, for over seven consecutive years, Star Media had been operating under loss, mainly due to charging depreciation expense on decoders sold to customers, contrary to the policies of other companies in the same industrysuch as Azam Media and DSTV. “We noted that, once these assets are sold, Star Media does not incur any cost to service or replace them.

A total depreciation charge of US Dollars 30 million was charged against profit for a period of six years from 2010 to 2015, said the CAG in his report tabled in parliament on Monday. According to Dr Mwakyembe, as a result of several unfriendly issues that are currently being sorted out, Star Media had already disbursed to TBC 3bn/- as a subsidy for 2008.

Since the CAG report was tabled, ministers have been appearing before the media to issue clarifications on the issues raised. Yesterday, it was time for Dr Mwakyembe and Industries Trade and Investment minister Charles Mwijage. They were franked by Finance and Planning minister Dr Philip Mpango. In his response to the TBC and Star Media contract, Dr Mwakyembe said after President John Magufuli toured TBC headquarters in Dar es Salaam, he directed that returns enshrined in the contract start to be remitted immediately.

The directive by the Head of State came just a few months after the TBC board asked the CAG to conduct a special audit on the seven-year accumulated undisbursed returns. “Following the President’s directive, I summoned the President of Star Times Group so that we can discuss the challenges we are facing in the contract and later I formed a sub-committee under the Director of Information Services and government spokesperson, Dr Hassan Abbas.

The findings of the two reports were presented in November, last year, after which the minister formed yet another committee to make a thorough assessment of the two reports,” according to the minister.

He added that his committee found out that the contract was vague and it gave the main shareholder, Star Communication huge discretionary powers, the board of the directors was weak, financial reports were written in Chinese language and that made it difficult for Tanzanians to understand, among others