(Reuters) - DirecTV said an internal investigation found that its Latin America unit had over-reported subscriber numbers at the end of March by about 200,000 due to improper practices by some employees.
The satellite TV provider said some Sky Brasil employees had improperly credited subscriber accounts to reduce or eliminate balances owed, artificially reducing attrition.
The company said it expected to take a pretax charge of about $25 million in the second quarter to recognize the increased churn.
Based on initial results of the investigation, the company estimated that the number of Sky Brasil subscribers as of December 31, 2012 would have been about 100,000 lower than previously reported to Brazil's national telecommunication agency.
The subscriber count at March 31 would have been about 200,000 lower, the company said in a regulatory filing on Thursday. (link.reuters.com/cyz29t)
Sky Brasil had told the agency it had about 5 million subscribers at the end of December and about 5.3 million at the end of March.
DirecTV, which has a total of more than 20 million customers, owns about 93 percent of Sky Brasil.
Much of DirecTV's subscriber growth has come from the expanding middle class in countries such as Brazil. It also operates in Colombia, Argentina, Venezuela, Chile and Ecuador.
Last month, DirecTV's shares rose to a decade-high after it reported a first-quarter profit that beat analysts estimates, helped by better-than-expected growth in Latin America.
The company said it expects to remove substantially all subscribers who were improperly recognized as active from Sky Brasil's subscriber base by the end of June.
DirecTV shares, which have fallen marginally since the company reported first-quarter results on May 7, closed at $61.08 on the Nasdaq on Wednesday.
(Reporting by Chandni Doulatramani in Bangalore; Editing by Roshni Menon)