East African mobile music streaming service Mdundo has said Tanzanian artists waiting to be paid are still without their royalties due to errors made by its local agent in the country and the refusal of some artists to refund cash paid in error.
Launched in Kenya in 2012 by 88mph, Mdundo expanded to Tanzania the next year after earning US$125,000 in follow-on funding.
After criticisms surfaced online from some Tanzanian artists whose music is available on the platform that they had not yet been paid their latest royalties, the startup wrote an open letter on its website blaming local company Selcom Wireless for the situation.
“Mdundo hired a company in Tanzania to pay out our artists due to the fact that there is no proper system in Kenya that can directly send mobile money to the country,” the letter read.
“In this case we acquired the services of a company named Selcom Wireless based in Dar es Salaam to complete the transactions on our behalf. All payments from Mdundo were sent out on Friday, January 23, way before the deadline we had set for January 25.”
The startup claims the Selcom system without its knowledge sent out the wrong amounts to a number of artists, causing the money to be recalled.
“However, there are some individuals who decided to help themselves to the money and withdrew it straight away,” Mdundo said.
“We reached out to the artists with some refusing to give back the money, and others switched off their lines.”
The letter – which also lists the names and phone numbers of the artists allegedly holding money – goes on to say Mdundo has written a letter of complaint to Selcom asking for the lost cash to be refunded, but the company has refused to take responsibility.
“Right now we are looking into ways to get the money back to pay all artists that have still not been paid. We do take responsibility for we have to maintain our high standards of service, and are looking into ways to make it work better in future,” Mdundo said.
“Please note that for those artists not paid yet, we still owe you the money and this shall be reflected in our system.”
Selcom Wireless denied any wrongdoing on its part, saying the fault was with Mdundo staff and that in fact, contrary to its normal practice, Selcom had overlooked a number of its due diligence processes in assisting Mdundo in the setting up of a portal.
“Understanding the urgency of the need to pay artists, Selcom provided guidance and support at every stage including file formats and examples so that Mdundo would not experience any delays due to Selcom,” the company said.
“Despite this, Mdundo’s staff uploaded a wrongly formatted file as result of which its artists received larger sums than those due to them. Selcom’s clients use its API at their own discretion and Selcom does not take liability for losses or loss of business. However, Selcom went out of its way to assist Mdundo in recovering the funds sent out. All the funds were recovered except about US$500 could not be recovered. As admitted by Mdundo, artists who immediately withdrew the funds refused to cooperate and refund the extra amounts. In these cases, Selcom was unable to assist and cannot be blamed for the loss of funds.”
