SUNBIZ

FBC Clears Details Of Its Financial State

The Fiji Broadcasting Corporation has revealed details about the state-owned enterprise’s financial performance over the past few years. FBC chief executive, Riyaz Sayed-Khaiyum, has further refuted remarks made about FBC’s
25 Feb 2015 08:23
FBC Clears Details Of Its Financial State
From left: FBC chief executive, Riyaz Sayed-Khaiyum and Board chairman, Sashi Singh

The Fiji Broadcasting Corporation has revealed details about the state-owned enterprise’s financial performance over the past few years.

FBC chief executive, Riyaz Sayed-Khaiyum, has further refuted remarks made about FBC’s operations by the OFFICE OF THE Auditor-General, labeling them as unsubstantiated.

Mr Sayed-Khaiyum said the Auditor-General right from the start had ignored basic fundamentals of good reporting practices by totally ignoring to contain in his final report their comments and genuine responses

“Our explanations and presentation of facts which are printed in the report are completely ignored by the Auditor-General in his conclusion,” he said.

“This is to the point of contradicting himself by saying on one hand that depreciation was a major issue but then on the other hand saying losses were due to high operating costs adding that there is a need for an expert review of our business operations.”

Mr Sayed-Khaiyum admitted FBC had posted a loss of $5.6 million in 2013, but he said they had budgeted for losses from 2010 to 2013, something which was not mentioned by the Auditor-General.

“When a company undertakes a major project to start new operations such as a TV station, it is very normal and indeed expected to budget for losses of around four to five years,” he said.

“A start off, especially one like ours has immense capital expenditure. Incidentally the FBC had been making profits until 2009 when it was only operating its radio stations.”

Mr Sayed-Khaiyum said the other point the Auditor-General did not mention in his FBC report was the fact that their revenue in 2013 increased by 27 per cent when compared to 2012.

“It seems that the OAG does not understand the basic distinction between revenue and profit,” he said.

Government fee

Mr Sayed-Khaiyum said the Office of the Auditor General was also very critical of FBC treating the government fee they receive for producing public service broadcast programmes as a capital grant and not income.

“The directive to treat it as such is from the Cabinet and FBC will always follow instructions from its shareholders,” he said.

“In fact the irony is if the FBC did follow the OAG’s recommendations and treated this as income then we would have made a smaller loss of $2.6 million as opposed to the loss of $5.6 million in 2013.

“It must be understood once and for all by all parties concerned that the money the FBC receives from the government is not a grant but a fee specifically for the production and broadcast of public service programmes for all Fijians.

“In fact the fee that the FBC receives from the government as per the PSB contract is significantly less than the value of service produced and provided for by the FBC.

“While the FBC receives an annual fee of $2.9 million for PSB production and transmission from the government, the actual value of the service is around $22 million.

“This translates into FBC receiving 86 per cent less than what it should be entitled to receive for producing public service programmes.

“In essence FBC has and continues to subsidise public service programms worth millions of dollars.

“In addition to this the FBC on an annual average provides $400,000 worth of advertising for charitable organisations as part of its social obligations.”

Exception to comments

Mr Sayed-Khaiyum attributed these as reasons they took great exception to the Office Of The Auditor General’s comments.

This was that FBC’s business operations may need to be reviewed by experts to identify areas that need to be streamlined to reduce business costs.

“Careless and indeed reckless comments like this by one of the most important offices in the government has the potential to devastate the countless hours of hard work that has taken to build the reputation of the FBC as the best,” he said.

He has therefore urged the Office Of The Auditor General to seriously review its recommendations.

“Especially to get views and comments of the entities concerned and actually consider and include them in his conclusion. Because to not do so infringes on the rights of such entities,” he said.

“The irony is that while the OAG purports to report and recommend on issues to improve the FBC’s operations, its actions and statements in fact could end up having a detrimental effect on FBC’s reputation and subsequently its revenue as well.”

 



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