DirecTV, which Buffett’s Berkshire owns 3.8% with investment cost at $45.9 per share, Overstated Its Brazilian Subscribers by 200,000

June 28, 2013 Leave a comment

DirecTV Overstated Its Brazilian Subscribers by 200,000

DirecTV (DTV), the largest U.S. satellite-TV provider, will take a pretax charge of $25 million after an internal investigation found that it had overstated subscriber numbers in Brazil by hundreds of thousands. The shares fell. Beginning in 2012, some Sky Brasil employees improperly credited customer accounts to reduce or eliminate churn, the El Segundo, California-based company said in a filing. The number of Sky Brasil subscribers on December 31 was about 100,000 lower than previously reported to Brazilian regulators and 200,000 lower than cited on March 31, the company said. DirecTV, which had considered buying Vivendi SA’s Brazilian phone and Internet unit before withdrawing from a bidding war in March, reported a record number of Latin American customers in the first quarter. Gross additions in the region jumped 14 percent to 1.2 million in the first quarter, driven by demand in Brazil, Argentina and Colombia. Sky Brasil’s ongoing churn in Brazil will be higher than previously anticipated, the company said today. The $25 million expense covers capitalized installation costs and subscriber related equipment held by the terminated customers, according to the filing. DTV fell 3.6 percent at $58.90 at 9:39 a.m. New York time, for the biggest intraday decline since Feb. 14. Through yesterday, the shares had advanced 22 percent this year, while the Standard & Poor’s 500 Index added 12 percent.

To contact the reporter on this story: Niamh Ring in New York at nring@bloomberg.net

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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