Wednesday, August 25, 2021

MultiChoice's share price falls nearly 8% on Wednesday to 11-month low as Nigeria's shakedown for money from the pay-TV operator continues and country demands MultiChoice pays 50% 'deposit' of R65 billion in dodgy 'tax backlog' claim.

by Thinus Ferreira

The share price of the MultiChoice Group fell nearly 8% on late Wednesday as Nigeria's tax body demanded that the pan-African pay-TV operator pay a 50% deposit or R33 billion of a whopping 1.8 trillion naira (R65 billion) - as part of yet another dodgy so-called "tax backlog" claim.

Nigerian authorities that appear to run a lucrative ongoing racket of targeting companies like MTN and others in shakedowns to solicit billions of rand to fund empty state coffers as the West African country's struggling economy continues to tank, has now moved its target, with MultiChoice that is in the crosshairs.

After banning the social media network Twitter and constantly attacking South African and multi-national business trying to operate in the struggling country, Nigeria continues to inflict massive damage on the country's reputation as an investment destination.

As a result, Nigeria has steadily become increasingly toxic for any international and pan-African companies and any companies that considered making any form of foreign investment in Nigeria.

On Wednesday Bloomberg reported that an appeals tribunal in Lagos has ordered MultiChoice to pay a "50% deposit" of 1.8 trillion naira that is claimed as a so-called "tax backlog".

MultiChoice as a company in totality, beyond just MultiChoice Nigeria, doesn't have that much money, with the R65 billion that is bigger than the MultiChoice Group's entire market capitalisation.

Nigeria's  Federal Inland Revenue Service (FIRS) in a statement on Wednesday says the billions of rand it demands from MultiChoice as a so-called "deposit" must be paid as a pre-condition for MultiChoice's "tax backlog" case to be heard as "a full appeal" on the matter.

The case has been adjourned to 23 September 2021, subject to the company complying with its order, and with the appeals tribunal that will only hear the case if MultiChoice complies and pays a staggering R33 billion as a "deposit".

MultiChoice's share price fell to an 11-month low on Wednesday. The MultiChoice Group had no immediate statement.

Last month Nigeria's tax authority also asked lenders to freeze MultiChoice Nigeria's bank accounts in Nigeria to try and "recover" the alleged "tax backlog"money after MultiChoice Africa and its Nigerian subsidiary had refused access to their computer servers for auditing.