An audit report has revealed discrepancies in the financial records of the Communications Authority of Kenya (CA), with allegations that Telkom Kenya owes Sh1.07 billion in outstanding debts. The Auditor-General, Nancy Gathungu, confirmed the debt was recorded in the CA's 2020 accounts, including Sh292 million in general provisions and Sh780 million in specific provisions.
Telkom Kenya categorically denied the claim, stating in a December 21, 2020, letter that no amount was owed to the regulator. However, the company provided no reconciliation for the Sh1.07 billion discrepancy between its records and the CA's accounts, according to the report.
The audit also highlighted that the National Treasury allocated funds for Telkom's frequency spectrum fees in the 2020/21 financial year, despite the telco having fully provisioned for the debt. This raised questions about the accuracy of the CA's reported receivables of Sh310.82 million as of June 30, 2020.
The controversy emerges amid unresolved tensions following the collapse of Telkom's proposed merger with Airtel Kenya. The 2019 agreement to form a joint venture called Airtel-Telkom fell apart after the National Treasury withheld approval, with Airtel citing regulatory hurdles and shifting market dynamics driven by the pandemic.
