Multichoice Group, known as DSTV, maintained an account balance of N31.6 billion with Heritage Bank before the bank’s recent liquidation.
According to Multichoice’s FY 2024 annual report, the group initially deposited N33.7 billion (equivalent to 488 million South African Rands) by the fiscal year’s end on March 31, 2024. However, cash withdrawals reduced this amount to N31.6 billion (ZAR 400 million) before Heritage Bank’s liquidation on June 3, 2024.
This substantial deposit raises concerns for Multichoice as it surpasses the NDIC’s guaranteed maximum payout of N5 million for depositors.
As stated in its annual report, Multichoice plans to collaborate with the NDIC, now the bank’s liquidator, to secure a favourable resolution.
NDIC’s Actions: In a press release dated June 3, 2024, the NDIC officially announced Heritage Bank’s liquidation. The NDIC clarified that depositors with balances exceeding N5 million will receive a dividend from the bank’s liquidation proceeds, subject to asset realization and debt recovery.
To facilitate this process, the NDIC has initiated a public bidding phase to sell Heritage Bank’s assets. A June 13, 2024 newspaper advertisement invited the public to participate in competitive bidding for the bank’s properties and chattels.
Historical Relationship and Multichoice’s Financial Challenges: Multichoice and Heritage Bank had a longstanding partnership, with the bank sponsoring key Multichoice initiatives such as Big Brother Naija and the Africa Magic Viewer’s Choice Awards (AMVCA).
In their FY 2024 report, Multichoice Group disclosed a $184 million repatriation from Nigeria, marking a 39.4% increase from the previous fiscal year. Despite this, cash balances decreased to $39 million, down from $104 million in FYE 2023, primarily due to exchange rate fluctuations impacting remittances from Nigeria.
Multichoice also reported significant losses on cash repatriations amounting to ZAR 1.064 billion, attributable to disparities between official and parallel exchange rates.
DSTV, the group’s flagship product, experienced an 18% decline in active Nigerian subscribers, reflecting a reduced contribution to group revenue outside South Africa, which dropped from 44% in FYE 2022 to 35%.
Meanwhile, Multichoice’s BetKing Nigeria witnessed a 37% surge in online users and a 26% revenue increase in Naira during FY 2024. However, in USD terms, BetKing’s revenue declined by 26% compared to FY 2023.
During FYE March 31, 2024, DSTV implemented two subscription fee hikes in Nigeria, citing inflation exceeding 30%. These price adjustments sparked controversy, leading to legal actions.
On April 29, 2024, the Competition and Consumer Protection Tribunal (CCPT) in Abuja restrained Multichoice Nigeria from further price increases, responding to a motion filed by Mr. Festus Onifade.
Multichoice Nigeria contested the tribunal’s jurisdiction in a subsequent ruling on May 7, 2024. As a result, on June 7, 2024, the tribunal fined Multichoice Nigeria N150 million for challenging its authority and mandated the company to offer Nigerians a free one-month subscription period.
