N31.6 billion belonging to Multichoice (DSTV Nigeria) trapped in liquidated Heritage Bank

Multichoice Group, the owners of DSTV, had an account balance of N31.6 billion with Heritage Bank prior to the bank’s liquidation. The group’s annual report for the fiscal year ending March 31, 2024, revealed that Multichoice initially held a deposit of N33.7 billion (488 million South African Rands) with Heritage Bank. This amount was later reduced to N31.6 billion (ZAR 400 million) due to cash remittances before the bank’s liquidation on June 3, 2024.

The substantial deposit has raised concerns, as it significantly exceeds the N5 million maximum payout guaranteed by the Nigeria Deposit Insurance Commission (NDIC). According to Multichoice’s annual report, the group plans to engage with the liquidator, NDIC, to “ensure a reasonable outcome is achieved.”

NDIC’s Actions Following Heritage Bank’s Liquidation

In a press release dated June 3, 2024, the NDIC announced the liquidation of Heritage Bank. The statement noted that depositors with funds exceeding N5 million would receive a liquidation dividend, contingent upon the sale of the bank’s assets and the recovery of outstanding debts. To this end, the NDIC has initiated a public bidding process for the sale of Heritage Bank’s assets.

A newspaper advertisement on June 13, 2024, from 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 purchase the assets (landed property and chattels) of the defunct Heritage Bank through public competitive bidding.”

Multichoice Nigeria’s Financial Challenges

Multichoice’s FY 2024 annual report also highlighted financial difficulties in Nigeria. The group repatriated $184 million from Nigeria, marking a 39.4% increase from the $132 million repatriated in the previous fiscal year. However, these remittances reduced the group’s cash balances to $39 million, down from $104 million as of the end of the previous fiscal year. The group suffered significant losses due to exchange rate instability, amounting to ZAR 1.064 billion on cash remittances.

DSTV, Multichoice’s flagship product, reported an 18% decline in active subscribers in Nigeria. Consequently, Nigeria’s contribution to the group’s revenue (excluding South Africa) fell to 35%, down from 44% as of the end of the 2022 fiscal year.

Conversely, Multichoice’s betting business, BetKing Nigeria, showed a 37% growth in online users in FY 2024, with revenue increasing by 26% in Naira terms. However, in USD terms, BetKing reported a revenue of $147 million, a 26% decline from the previous fiscal year.

Regulatory Challenges and Market Reaction

During the fiscal year ending March 31, 2024, DSTV increased its subscription fees twice in Nigeria to “track inflation that exceeded 30%.” These price hikes have drawn criticism. On April 29, 2024, the Competition and Consumer Protection Tribunal (CCPT) in Abuja restrained Multichoice Nigeria from increasing the subscription fees for DSTV and GOtv following a motion filed by Mr. Festus Onifade. Multichoice Nigeria challenged the tribunal’s jurisdiction in a subsequent ruling on May 7.

On June 7, 2024, the tribunal fined Multichoice Nigeria N150 million for challenging its jurisdiction and ordered the company to provide Nigerians with a one-month free subscription.

Past Ties with Heritage Bank

Multichoice and Heritage Bank have had a strong relationship in the past, with the bank sponsoring the group’s initiatives such as Big Brother Naija and the Africa Magic Viewer’s Choice Awards (AMVCA).