Multichoice Group, owners of DSTV, had an account balance of N31.6 billion with Heritage Bank, before the bank’s liquidation.
According to the group’s annual report for FY 2024, Multichoice had a deposit of N33.7 billion (488 million South African Rands) with the bank as of the 2024 fiscal year end on March 31, 2024.
However, that balance was subsequently reduced to N31.6 billion (ZAR 400 million) due to cash remittances before the bank’s liquidation on June 3, 2024.
The significant deposit raises concerns for the group, as the sum far exceeds the N5 million maximum payout guaranteed by the Nigeria Deposit Insurance Commission (NDIC).
However, according to Multichoice’s annual report, the group will engage the liquidator (NDIC) to “ensure a reasonable outcome is achieved”.
What the NDIC is doing
In a press release dated June 3, 2024, the NDIC announced the liquidation of Heritage Bank. The statement specified that depositors with funds exceeding N5 million will receive a liquidation dividend, contingent upon realising the bank’s assets and recovering its outstanding debts.
In line with this step of selling the bank’s assets, the NDIC has announced a public bidding process for the sale of Heritage Bank assets.
The NDIC through a newspaper advert on June 13, 2024, noted,
“The Nigeria Deposit Insurance Corporation in the exercise of its rights as Liquidator of failed Deposit Money Banks hereby invites interested members of the general public to buy the assets (landed property and chattels) of defunct Heritage Banks through public competitive bidding.”
Multichoice and Heritage Bank had strong ties in the past, as the bank was a sponsor of the group’s endeavours, such as Big Brother Naija and the Africa Magic Viewer’s Choice Awards (AMVCA).
Multichoice Nigeria’s financial troubles
In its FY 2024 annual report, Multichoice Group reported a repatriation of $184 million from Nigeria, representing a 39.4% increase from the $132 million from the previous fiscal year.
However, the group’s remittances from Nigeria drove down its cash balances to $39 million, from $104 million as of FYE 2023.
Multichoice Group also incurred significant losses on its cash repatriations from the Nigerian market due to exchange rate instabilities.
During the fiscal year, Multichoice incurred losses of about ZAR 1.064 billion on cash remittances, due to the translation differences between the official and parallel exchange rate.
The group’s flagship product, DSTV reported an 18% decline in active subscribers in Nigeria, as Nigeria’s contribution to the group’s revenue excluding South Africa, dropped to 35%, from 44% as of FYE 2022.
Multichoice’s betting business, BetKing Nigeria, reported a 37% growth in online users in FY 2024, with its revenue growing by 26% in Naira. However, in USD, BetKing reported a revenue of $147 million, marking a 26% decline from FY 2023.
During the fiscal year ending March 31, 2024, DSTV increased its subscription fee twice in Nigeria. According to the group, the reason was to “track inflation that exceeded 30%”. However, due to its price increases, Multichoice Nigeria has been in the eye of the storm in Nigeria.
On April 29, 2024, the Competition and Consumer Protection Tribunal (CCPT) sitting in Abuja restrained Multichoice Nigeria from increasing the subscription of DStv and GOtv in a ruling on a motion filed by Mr. Festus Onifade.
However, in a subsequent ruling on May 7, Multichoice Nigeria challenged the jurisdiction of the tribunal in restraining it from a price increase.
Then on June 7, 2024, the tribunal fined Multichoice Nigeria N150 million for challenging its jurisdiction to rule on the motion, while ordering the company to give Nigerians, a one-month free subscription.
