The Moi family-owned Standard media Group is on the verge of going under after it emerged that employees have not been paid their August salaries.
Senior staff who include editors, accountants, managers and reporters are yet to be paid August dues even as it emerges that correspondents have not been paid for four months now.
Sources indicate that SG had not remitted Pay As You Earn (PAYE) to KRA for the last five years, amounting to around Sh600 million.
This is in spite of the Standard Group deducting the same religiously from its employees.
Other than PAYE, other statutory deductions that are not remitted include pension, NSSF and SACCO contributions amounting to Standard SACCO and Network SACCO where the majority of employees are.
Many of SG’s former employees who were either fired or retired have not been able to access their pension from the Liaison Group that administers the fund due to non-remittance.
Last week, the banks cancelled existing overdraft facilities, which now starves SG of cash liquidity to cater for services such as fueling cars, insurance premiums and logistics operations.
And by yesterday, a senior manager from Finance told us that NCBA Bank has written notice to the CEO Orlando Lyomu informing him of the decision to refer SG to the CRB for dishonouring pledge to service a Sh400 loan taken to finance the Convergence project which insiders insist has by all means flopped.
To illustrate Standard Group’s mountain of debt, NAS services, which offers catering services to staff at subsidised rates, threatened to close down a fortnight ago.
The company has had to discontinue maintenance of critical services like SAP in the Finance department, PPI for editorial and advertising and Microsoft over a debt estimated at around Sh300 million.
“The main satellite provider for the TV services has threatened to shut down on September 5 during the Supreme Court ruling.
It took the intervention of managers to explain to the Canadian firm the security implications of such a move of taking KTN and KTN News and its sister radio stations off the air at such a critical time,” said another source from the Technical department privy to the happenings.
If this happens, staff wonder if majority shareholder Gideon Moi and his family have turned a deaf ear to pleas from demotivated employees.
They know that Gideon, having lost his Baringo seat, may turn his focus on rescue efforts if the country’s oldest media house is to survive the Cannibalism sparked by unchecked expansion and misplaced priorities.
Another insider measured the current situation as “Being in the Standard Group now is similar to being in the Titanic Ship that hit an icebag in the Atlantic. The company is basically insolvent and will only require a neurosurgeon kind of operation to wake up the patient who is suffering from brain death.”
According to another insider, SG is suffering from weak corporate governance at the Board level.
The board has remained silent as the SG has recorded losses for the last three years and this year is likely to hit Sh1 billion loss.
“Where has the Board been when the situation deteriorated from worse to worst? Who is sleeping on their job?” the insider asks.
There has been talk that statutory deductions and an advance payment of Sh100 million was spent on paying July salaries and now management is at a loss of explaining how they spent the cash in order to access more funds.
Meanwhile, the business is bleeding to death.
Amidst all these, CEO Lyomu has been globe-trotting.
In the last three months, he has been to Seychelles, Mauritius, Zimbabwe, and South Africa.
He returned from a trip to the Netherlands last week and he is off to China next week.
“It is insensitive and immoral that he is doing this at the expense of the company, yet employees have not been paid. He doesn’t care anymore. He is there to enjoy himself while it lasts even as he knows that SG is headed for a deadly crash.” a staffer lamented.
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