Nigeria’s Federal Inland Revenue Service has ordered MultiChoice Nigeria to pay 50% of a disputed 1.8 trillion Naira tax bill as a condition to an appeal being heard in a Lagos court which later saw the company stock take a loss of $240 million of market value in less than two hours.
MultiChoice which is now Africa’s biggest pay-TV provider entered Nigeria in 1996 as a joint venture formed between Adewunmi Ogunsanya and MultiChoice Africa.
When news broke regarding the court’s 50% of 1.8 trillion Naira order, it prompted a rush to sell shares, leading the company’s stock to decline 8% by the close in Johannesburg on Wednesday 25th, nearing a whooping 11-month’s lows.
“The market needed quicker communication from MultiChoice as it’s unsure what the company’s position is and how serious the situation is,”said Greg Davies, a Money Manager with Cratos Capital in Johannesburg.
In an emailed statement, MultiChoice has also come out to dispute the amount the Nigerian courts want it to pay, saying it owes far less and continues to engage with the authorities.
Nigeria’s tax authority has also asked lenders to freeze MultiChoice’s local bank accounts to recover the alleged tax arrears last month because the company refused to grant access to its servers for an audit.