On Wednesday, a ‘leaked’ memo circulating on social media indicated that Standard Group has declared insolvency, and will soon be liquidated.
The letter, widely shared on Twitter, appeared to be an internal memo notifying the media company’s staff of the board’s decision to shut down the company. The shut down would apparently affect all Standard Group properties, among them KTN, Radio Maisha, Spice FM, Standard Newspaper, The Nairobian and more.
The letter, comically dated 1st May 2024, read in part,”
REF: DECLARATION OF INSOLVENCY
This is a notice to the greater public that through a special resolution by the Board of the Standard Group Ltd, a declaration of insolvency is hereby issued. The Board has seen it fit to invoke the Insolvency Act (No. 18 of 2015) and signal the liquidation of the entire Standard Group encompassing assets of KTN, KTN News, Radio Maisha, The Nairobian, The Standard, KTN Farmers TV, BTV, Spice FM, Vybez Radio and Berur FM.
The Acting Standard Group CEO, Joe Munene has been tasked to declare redundancies across all departments. All employees will be duly informed in writing. They will receive notice pay as per the Contract of Employment, and payment of leave days accrued and not taken at the time of exit.
The reasons for this declaration of insolvency will be communicated at our AGM slated for Monday 24th July 2024. To our esteemed readers, viewers and listeners it has been great serving you for more than a century. We take this opportunity to immensely thank you for your support.
Hours after the memo started circulating, the media company came out and labelled the reports as Fake.
“FAKE NEWS ALERT: This is NOT a genuine memo from The Standard Group PLC or any of the brands associated with it. It is a manipulated post. Be cautious NOT to fall for propaganda and deep fakes.”
As much as the memo was fake, the premise did not appear from thin air.
Standard Group has been struggling for years.
Last year, the Kenya Union of Journalists issued the company with an ultimatum for “defying labor laws and denying workers salaries.”
Employees at Kenya’s second largest newspaper printer had gone months without a salary. The company had also failed to submit their savings to the company sacco.
“Standard Group PLC, the oldest media house in this region, has not paid its staff for six months, with photographers and correspondents going for 10 months without getting compensation for their daily toil.
This is not only illegal but immoral and a gross violation of human rights, and therefore, the company must be held to account, especially by its stakeholders and business partners.
We call upon the board of Standard PLC to respect the rights of these workers and meet their end of the bargain so that their staff can live in dignity and meet their financial obligations.
We also call for investigations into the company’s financial transactions to explain to the public what went wrong.
Last but not least, workers have lost their savings with Standard Sacco as a result of non-remittances from the company, and we call upon the Sacco Societies Regulatory Authority to help members recover their money.” the statement from KUJ read in part.
Standard Group has been a loss-making entity for a while, and things may be about to get much worse for the Mombasa road-based media company.
On top of the changing consumer media consumption habits, the company recently lost a lucrative government deal, becoming a victim of the Kenya Kwanza administration’s expenditure cuts.
The government overlooked Standard, Nation and Mediamax, instead choosing The Star to distribute the weekly MyGov publication. The Star offered the lowest distribution price at only Sh9 million a week, compared to the others which offered over Sh20 million a week.
This deal was worth hundreds of millions of shillings a year to the Standard.
The contract between the government and The Star is now being litigated, with the LSK arguing that this move would undermine media freedom and restrict public access to information.
Should the courts fail to cancel the contract, it could be a devastating blow to Standard Group, as government revenue reportedly accounted for over 30% of its revenue… and still it was struggling.
