Multichoice Group had N31.6 billion with defunct Heritage Bank, exceeding the insured limit. Group to engage liquidator for reasonable outcome amid financial challenges.
The revelation that Multichoice Group, the parent company of the popular pay-TV service DStv, had a staggering N31.6 billion (approximately $86 million) account balance with the now-defunct Heritage Bank has sent shockwaves through Nigeria's business landscape. According to the group's annual report for the 2024 fiscal year, the initial deposit stood at N33.7 billion (488 million South African Rands) as of March 31, 2024. However, this balance was subsequently reduced to N31.6 billion due to cash remittances before the bank's liquidation on June 3, 2024.
The significant deposit raises concerns for Multichoice Group, as the sum far exceeds the N5 million maximum payout guaranteed by the Nigeria Deposit Insurance Commission (NDIC). In response, the group has stated its intention to engage with the liquidator (NDIC) to "ensure a reasonable outcome is achieved."
The NDIC has announced a public bidding process for the sale of Heritage Bank's assets, including landed properties and chattels, as part of the liquidation process. This move aims to recover funds to compensate depositors with balances exceeding the insured limit.
Multichoice Group's financial troubles extend beyond the Heritage Bank situation. The group reported a decline in active DStv subscribers in Nigeria by 18%, with the country's contribution to the group's revenue (excluding South Africa) dropping from 44% to 35%. Additionally, the group incurred losses of approximately ZAR 1.064 billion (over $60 million) on cash remittances due to exchange rate instabilities.
Source: Nairametrics
