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Price hike: MultiChoice risks remitting 10% of 2021 profit for contempt of court

Price hike: MultiChoice risks remitting 10% of 2021 profit for contempt of court
September 06
16:06 2022

A Competition and Consumer Protection (CCP) tribunal sitting in Abuja has ordered MultiChoice to produce its audited 2021 financial report for violating the tribunal’s restraining order on tariff increase.

Multichoice is the owner of the satellite television services, DStv and GOtv — popular subscription-based platforms in Nigeria.

Festus Onifade, a legal practitioner, had sued the company on behalf of himself and the coalition of Nigerian consumers.

While MultiChoice Nigeria Limited is the first defendant, the Federal Competition and Consumer Protection Commission (FCCPC) is the second respondent.

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Onifade had prayed the tribunal for an order restraining the firm from hiking subscription fees for its services and other products on April 1, pending the hearing and determination of the motion on notice dated and filed on March 29.

The tribunal had granted an ex parte motion, directing parties to maintain “status quo antebellum” (to maintain the situation as it existed before).

The tribunal also reiterated its order on April 11.

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But in disregard of the order, MultiChoice implemented its planned increase in tariff on April 1.

Consequently, the claimant had raised the issue of contempt, accusing the 1st defendant (MultiChoice) of disobeying the tribunal order of March 30, 2022, which restrained them from going ahead with the price increase.

He prayed the court to direct MultiChioce directors to appear before the tribunal and “show cause why they should not be committed to prison for willful disobedience of the order of this honourable tribunal granted on March 30 2022″.

Onifade also prayed for an order for them “to show cause why MultiChoice should not be made to pay 10 percent of its annual turnover for contravention or failure to, comply with an interim order of this honourable tribunal.”

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In its defense, MultiChoice through its counsel, Jamiu Agoro, argued that the organisation had already configured all its devices for the increase in tariff to take effect before the tribunal made its order.

However, the tribunal resolved that the first defendant was indeed in breach of the order of the tribunal made on March 30.

The tribunal, therefore, ordered that the directors of MultiChoice should appear before it on September 8 with a certified true copy of a detailed financial report of the company’s 2021 financial year.

“The managing director and directors of the 1st defendant (MultiChoice) are to appear before this honourable tribunal with certified true copies of their audited financial report for the year 2021,” Thomas Okosun, chairman of the tribunal, ordered.

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The tribunal explained that the audited financial report will “enable the tribunal to determine the appropriate penalty to impose on MultiChoice for being in contempt of the orders of this honourable tribunal made on March 30.”

According to section 51 (2) of the FCCP Act 2018, a corporate body is liable upon conviction for contempt of a fine not more than 10 percent of its turnover in the preceding year.

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“An administrative penalty imposed under subsection 1, shall not exceed 10 percent of the undertaken’s annual turnover and its export from Nigeria during the preceding financial year,” the act reads.

Earlier, the tribunal had dismissed the defendant’s application challenging its jurisdiction to entertain the suit.

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