The proprietors of DSTV, Multichoice Group, maintained an account balance of N31.6 billion with Heritage Bank prior to the bank’s liquidation.
Multichoice had a deposit of N33.7 billion (488 million South African Rands) with the bank as of the fiscal year’s conclusion on March 31, 2024, according to the group’s annual report for FY 2024.
Before the bank’s closure on June 3, 2024, cash remittances caused the balance to be subsequently decreased to N31.6 billion (ZAR 400 million).
The size of the substantial deposit worries the firm since it is significantly more than the N5 million maximum payout that the Nigeria Deposit Insurance Commission (NDIC) guarantees.
In order to “ensure a reasonable outcome is achieved,” the group will work with the liquidator, the NDIC, according to Multichoice’s annual report.
What the NDIC is doing
The NDIC declared in a press release dated June 3, 2024 that Heritage Bank will be liquidated. According to the announcement, depositors who have more than N5 million in money would get a liquidation dividend, provided the bank’s assets are sold and its outstanding obligations are paid off.
Following the banking and finance news, the NDIC has declared a public bidding procedure for the sale of Heritage Bank assets in keeping with this step of selling the bank’s assets.
In a June 13, 2024, newspaper advertisement, the NDIC stated, “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.”
Strong relations existed between Multichoice and Heritage Bank in the past because the bank supported the group’s initiatives, including the Africa Magic Viewer’s Choice Awards (AMVCA) and Big Brother Naija.
Multichoice Nigeria’s Financial Troubles
Multichoice Group reported a repatriation of $184 million from Nigeria in its FY 2024 annual report, a 39.4% increase over the $132 million from the previous fiscal year.
Its cash balances decreased to $39 million from $104 million as of FYE 2023, primarily due to remittances from Nigeria. Furthermore, exchange rate volatility cost Multichoice Group a lot of money when it came to its cash repatriations from the Nigerian market.
Continuing, because of the discrepancies in currency rates between the official and parallel systems, Multichoice lost almost ZAR 1.064 billion on cash remittances during the fiscal year.
Nigeria’s active subscriber base for the group’s flagship product, DSTV, decreased by 18% as the country’s revenue share, exclusive of South Africa, decreased from 44% in FYE 2022 to 35%.
The online user base of Multichoice’s betting company, BetKing Nigeria, increased by 37% in FY 2024, while its Naira income increased by 26%. Nonetheless, BetKing reported $147 million in revenue in USD, a 26% decrease from FY 2023.
Twice in the Nigerian fiscal year that concluded on March 31, 2024, DSTV raised its subscription cost. The group stated that the purpose was to “track inflation that exceeded 30%.” However, Multichoice Nigeria has been caught in the crosshairs in Nigeria as a result of its pricing hikes.
The Competition and Consumer Protection Tribunal (CCPT), located in Abuja, issued a verdict on a motion submitted by Mr. Festus Onifade on April 29, 2024, restraining Multichoice Nigeria from raising the DStv and GOtv subscription rates.
Multichoice Nigeria, however, contested the tribunal’s authority to prevent it from raising prices in a later decision on May 7.
However, on June 7, 2024, the tribunal ordered Multichoice Nigeria to give Nigerians a free one-month subscription in exchange for the firm contesting its authority to rule on the motion and fining the corporation N150 million for doing so.
