The management of NTA-Star TV Network Ltd, a joint venture between the Nigerian Television Authority and the StarTimes Group, has declared that no N200 billion is missing as suggested by the legislators.
In a release signed by the PR Manager, StarTimes Nigeria, Lazarus Ibeabuchi, and seen by Nairametrics, the company said that it is open to forensic audit of its financials, as requested by the Senate’s Joint Committee on Finance and National Planning.
They noted that the losses recorded over the years resulted from huge dollar investments made at the beginning, and naira depreciation over the years.
“We also want to clarify that no revenue is missing as gross earnings have been repeatedly ploughed back into cost of production to cover cost of components, namely transmitters, equipment, generating sets and satellite; content acquisition; as well as operating costs, which include salaries and other running costs, incurred within our ten years of operation,” the statement read.
Ibeabuchi added that the company’s accounts are audited by one of the big four audit firms in the world, widely known for their integrity and professionalism in the audit field, and that the corporate organisation had conducted its activities in line with statutory regulations.
They also said that the company’s accounts have also been fully audited by the Federal Inland Revenue Service, FIRS over the years.
“To this end, we are open to a proper investigation into our operations and financials, especially as we believe the company is run in a prudent, responsible and sustainable manner,” it read.
Why the loss
According to the statement, the loss is due to huge initial investments made in dollars, and the naira depreciation which has frustrated the long-term cost recovery planned out.
“Pay-TV business is capital intensive and has a long gestation period. More than 80 per cent of inputs into our operations are dollar-denominated. The naira fluctuations haven’t been favourable to the business, making it more and more difficult to meet dollar-denominated obligations,” Ibeabuchi said,
Ibeabuchi noted in the statement that the losses have been decreasing due to an improving operating environment, and assured that the company will achieve profitability shortly.
It would be recalled that on Monday the Director-General, NTA, Yakubu Ibn Mohammed while he was questioned by the Senate Joint committee on Finance and National Planning claimed that “not a single kobo was made from the joint venture with StarTimes in 11 years.”
The Senate on Tuesday, declared its interest in probing the Nigerian Television Authority (NTA) and StarTimes Joint Venture Agreement over the non-profitability of the venture which had been since 2008.
During an interactive session with some revenue-generating agencies of government, the chairman, Senate Joint Committee on Finance and National Planning, Solomon Adeola, queried the management of NTA, over 12 years of non-profitable venture with StarTimes.
The Senate asked that the management should appear before the committee along with the Managing Director, NTA TV Enterprises, Maxwell Loko.
According to the joint venture agreement, annual profits were to be shared in a 70:30 ratio between StarTimes and Nigeria.
Among other things, the Senate also queried why some accounts of StarTimes were in dollars and naira, and called for the stepping aside of the Managing Director, NTA TV Enterprises, chief executive officer of StarTimes and the director of tax, for an independent investigation.