HOW DSTV LOST ₦7.9 BILLION TO SCAM

In 2021, a third-party vendor scammed Multi Choice Nigeria, the owners of DSTV Nigeria, for a whopping 7.9 billion naira.

What could have happened that DSTV Nigeria, with its internal structure and control,became a victim of Yahoo Yahoo?

Join me as we explore the backstory and intrigue that led DSTV Nigeria to pursue legal action to recover the stolen money, as first reported by Premium Times.

In 2021, DSTV Nigeria desperately needed dollars, which they could not get from the official market.

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DSTV Nigeria is a South African company that does business in Nigeria and then receives its revenue in naira, but they need dollars to remain in business in Nigeria for the following reasons:

1) To pay for content abroad. With hard currency, they pay for most of the content we consume on their channels in Nigeria.

One of them is the much-followed English Premiership matches.

Another one is the favourite movie you watch every weekend.

2) To remit revenue and dividends to South Africa.

As we know, DSTV is a South African-owned company, so at the end of the financial year, they source for dollars at either the official or black market to be able to repatriate the profit back home to the owners in South Africa. They can’t repatriate naira.

When it comes to repatriation, DSTV is not an outlier. All foreign companies operating in Nigeria repatriate their profits back to the home country that owns them.

The failure of GSK to repatriate their profit back home at the official rate was the major reason they closed shop and left Nigeria because they could not afford to convert their profit on the black market.

It doesn’t make business sense to them.

So back to my story.

So, DSTV urgently and desperately needed the dollar equivalent of 7.9 billion naira.

When Emiefiele refused to give them the official dollar, they chose to go to the black market to source for the dollar, a practice that foreign-owned multinational businesses refused to do. That is why they are fleeing from Nigeria, but being an African business, DSTV chose to mitigate the risk by sourcing their dollars on the black market so as to remain in business.

They suffered a burn and had to learn their lesson the hard way.

The company engaged a currency broker, Akintunde Giwa, who earns a commission by assisting Nigerian businesses looking to buy US dollars with Nigerian Naira.

For proper context, Giwa is a BDC trader who is in the business of buying and selling dollars, and his relationship with DSTV Nigeria did not start today.

It has been a long-term relationship, and Giwa has always delivered, anytime he was mobilised by DSTV to source for dollars for them.

But this time, a third party’s scam prevented him from delivering on the agreement.

After receiving a 7.9 billion naira alert from DSTV Nigeria in September 2021, he transferred the funds to Frontier Limited, a company owned by Mr. Mervyn, who is currently on the run.

Giwa’s intention for wiring 7.9 billion naira to the Frontier FCMB’s bank account was for Mr. Mervyn to send $16.2 million to an account at Standard Chartered Bank in London, under the name of MultiChoice Africa, another company in the MultiChoice group of companies.

At the time, $16.2 million was equivalent to 7.9 billion naira.

Mr. Mervyn did not do so; rather, he became incommunicado and disappeared into the air after receiving the money from Giwa.

Seeing that he had been scammed and tired of making excuses for his client, DSTV Nigeria, who trusted him and were waiting for him to deliver, just as he had done in the past,.

Giwa went to the EFFC to file an official report narrating how Mr. Mervyn and his Frontier company scammed him.

When the EFCC attempted to contact Mr. Mervyn, they discovered that he had vanished into thin air. Consequently, they declared him wanted, offering a tempting reward to anyone who could assist the anti-graft commission in his arrest.

Tired of waiting since 2021 to get their money back, DSTV Nigeria sued Giwa, their broker, and Mr. Mervyn in a London court to recover their money, which has lost value since that time.

The value of 7.9 billion is no longer what it was in 2021.

In 2021, the dollar was 450; today it is 1,250 to $1, so this is a monumental loss for the DSTV Group.

But beyond this,

Mr. Giwa,the broker, is claiming that he was genuinely scammed, and he is shifting the liabilities to Frontier Company, where he sent the money from DSTV to

Evidence Dey that he made a transfer of 7.9 billion naira to an FCMB account belonging to Mr. Mervyn and Frontier Company.

The case is currently ongoing, and it shows the risk that comes with doing business in Nigeria.

Nigeria is a huge untapped market for big companies playing in the consumer market, but it comes with a lot of inherent risks.