The Competition Authority of Kenya on Tuesday, September 19 welcomed the decision by the Competition Tribunal to uphold a fine of Ksh7.2 million slapped on Makini School.
In a statement, the authority noted that Makini School acquired a campus in Kisumu County in 2019 without seeking approval from the completion watchdog.
“The Authority welcomes the judgement by the Competition Tribunal upholding the Ksh. 7.2 Million penalty on Makini School Limited for implementing a merger without approval,” the authority noted.
According to the authority, the decision affirmed its mandate in approving such deals.
In a ruling shared on Tuesday, September 19, the tribunal insisted that Makini School should have sought the approval of the Competition Authority of Kenya when it took over Bhayani Nursery and Primary School in Kisumu municipality.
Daniel Ogola led tribunal established that Makini School violated section 42(2) of the Act.
The school had challenged the penalty, which is equivalent to one percent of the turnover of Makini School for the year 2018 of Ksh723,987,619, imposed by the competition watchdog, arguing that there was no evidence or legal foundation to support the conclusions and orders made by CA.
While upholding the fine, the tribunal stated that customers are the ultimate asset for any profit-making organization and that students are the customers in a school, who remain the main continuous revenue stream for any school that is run as a business.
“We are not persuaded by the Appellant’s (Makini’s) argument that students being natural persons cannot be classified as assets of a school. We would agree with the Respondent that a school without students is not in business,” the tribunal ruled.
According to the tribunal, when Makini School took over the school complex of Bhayani School, it was an operational undertaking.
Makini maintained it did not acquire a lease from Bhayani School as stated by the Competition Authority of Kenya but it negotiated it with the landlord who is distinct and separate from the school and that Bhayani moved out before Makini embarked on renovation of the premises.
Following the ruling, Makini School will be compelled to pay the Ksh7.2 million penalty.
