South Africa’s MultiChoice Group, one of the leading entertainment companies in Africa, saw a rise in its shares on Thursday after the company reached a settlement agreement of $4.4 billion with Nigerian authorities.
According to Bloomberg, MultiChoice had agreed to withdraw all pending lawsuits against Nigeria, after they have been in a recurring feud over an alleged breach of agreements and denying officials access to its records for auditing.
“In broad of the agreement, MultiChoice will withdraw all pending lawsuits, and Firs resumed a forensic systems audit of MultiChoice accounts on Tuesday, 8 March to determine the tax liability of the company,” MultiChoice said.
“With the agreement and the resumption of the forensic systems audit, it is anticipated that the matters will be resolved expeditiously and shareholders will be kept informed of progress in this regard,” the company added.
Bloomberg reported that MultiChoice’s shares have held up over the eight months since the initial tax claim, gaining 9.2% over the period and that they have since risen 2.1% by the close in Johannesburg on Wednesday, valuing the company at R54 billion ($3.6 billion).
Last year, Federal Inland Revenue Service (FIRS) had ordered banks to freeze MultiChoice’s banking accounts and recover said $4.4 billion for the alleged breach of agreements.
MultiChoice appealed the matter and paid a $19.4 million deposit towards the claim, which it insisted was not an admission of guilt. The company maintained that it had always conducted its business in Nigeria lawfully, News24 reported.
Bloomberg said that this dispute was one of many that the Nigerian authorities had with South African firms. Johannesburg-based MTN reportedly paid more than a $1 billion fine and agreed to list its Nigerian operation in Lagos after a dispute over cancelling subscriptions of people without proper registrations in 2016.