Court declines MultiChoice’s plea to stop NBC from auditing company’s account

A Federal High Court in Abuja on Friday refused to grant an application filed by MultiChoice Nigeria Ltd. seeking an interim order restraining the National Broadcasting Commission (NBC) from requesting any financial, accounting, or tax documents from them.

Justice James Omotosho, in a ruling on the ex-parte motion moved by the apllicants’ counsel, Moyosore Onigbanjo, SAN, rather directed all parties, in the interest of justice, not to take any step that could make the outcome of the suit nugatory.

Although the ruling was delivered on Wednesday, its certified true copy was sighted on Friday.

“The ex-parte order for interim injunction dated May 8, 2024, filed on May 16, 2024, is hereby refused,” he declared.

Justice Omotosho then adjourned the matter until May 30 for a hearing of the motion on notice.

Supreme News reports that MultiChoice Nigeria Limited and Details Nigeria Limited, a provider of the subscription-based digital terrestrial television service known as GOtv, are the first and second applicants, respectively.

In the ex-parte motion marked FHC/ABJ/CS/652/2024 dated May 8 and filed May 16 by their lawyer, they sued NBC as the sole respondent.

The applicants sought three reliefs, including an order of interim injunction restraining NBC from carrying out any investigations of the companies for the purposes of determining their annual income or NBC levy for the years between 2014 and 2024, pending the hearing and determination of the motion on notice.

They sought an order of interim injunction restraining the NBC from requesting, demanding and or receiving any financial, accounting or tax documents from the companies other than the annual audited accounts of the companies already submitted to the commission.

They said this was in pursuant to Section 2 (10) (b) of the NBC Code 6th Edition for the purposes of determining her remittance of NBC levy for the 2014 to 2024 years of account pending the hearing and determination of the motion on notice.

They equally prayed an order of interim injunction restraining the commission from sanctioning, fining or suspending the companies’ license pursuant to the threats contained in its letter dated April 29 to them, pending the hearing and determination of the motion on notice.

In the affidavit deposed to by the companies’ Head of Compliance, Gozie Onumonu, he averred that the firms were mandated under the various NBC Codes to pay a certain percentage of their income as annual NBC levy to the respondent.

He said that the current code; NBC Code 6th Edition, provides for 2.5% of the income of a broadcaster to be paid to the respondent yearly as annual NBC levy while the erstwhile code which was amended in 2019 provides for 1.5% of the income of a broadcaster to be paid to the defendant yearly as annual levy.

He claimed that the companies had never defaulted in paying their annual levy to the commission.

“Income as provided by the NBC Code, 6th Edition, is not defined, nor is it defined in any other previous editions nor in the NBC Act 2004.

“As a result of the lack of definition of what an income is, there was a dispute between the applicants and the respondent in 2014 over whether income should be turnover or revenue minus the cost of production.

“After due negotiations, meetings, etc., between the applicants and the respondent, it was agreed by the applicants and respondent that income should be revenue minus cost of production.

“In the year 2014, when the applicants subtracted the cost of production from their revenue in order to arrive at the 1.5 percent required of the applicants under the NBC Code 5th Edition, what was left for the applicants to pay to the defendant in compliance with the 1.5% requirement of the NBC Code 5th Edition was negligible.

“The amount the respondent would have been entitled to from the applicants as annual NBC levy between 2014 and 2019 if the applicants were to strictly pay the 1.5% annual NBC levy provided by the 5th Edition of the Code was small and the respondent might not be able to carry out its administrative functions in view of its financial needs.

“Specifically, in the year 2014 and 2015, the amount that would have been due to the defendant as 1.5% of the annual income of the first applicant was N2.1 million (N2,167,254)

“As a result, the respondent beseeched the applicants to consent to the payment of a fixed sum of N500 million (N500,000,000) as annual levy for the applicants’ licence period of 2014 to 2019, the sum of which was far more than what the plaintiffs were supposed to be paying to the respondent if the applicants were to pay only 1.5 per cent of their annual income as provided by the NBC Code.

“For the years 2014 to 2019 that the respondent wants to carry out the investigation to verify whether the applicants paid up to 2.5% of their annual incomes as annual NBC levy, the operational NBC Code then was the NBC Code, 5th Edition, and it requires broadcasters to pay 1.5% of their annual incomes as annual levy,” he said.

Onumonu, who said the companies had already submitted a certified true copy of their audited account for the previous year(s) to NBC, said the commission was paid over N12 billion (N12, 490, 000, 0000) as an annual levy from 2014 to date.

The officer described NBC’s action as an abuse of power, urging the court to grant their plea in the interest of justice.