The US Securities and Exchange Commission (SEC) Monday charged Nigerian businessman Dozy Mmobuosi and his three companies including New Jersey-based Tingo Group with “massive fraud”, alleging they overstated their financials and those of their key subsidiaries to swindle investors.
The SEC disclosed in a statement that Mr Mmobuosi, who this April tabled an offer of £150 million to acquire English football club Sheffield United, led a plot that fabricated the financial reports of Tingo Group, Tingo International Holdings and Agri-Fintech Holdings as well as subsidiaries including Tingo Foods and Tingo Mobile Limited.
It noted that it filed the charges in the US District Court in New York against Tingo Group, Tingo International Holdings and Agri-Fintech Holdings for flouting the anti-fraud provisions of the federal securities laws and Nasdaq reporting and internal controls.
“The scope of the fraud is staggering. Please use the sharing tools found via the share button at the top or side of articles,” the statement said.
“Since 2019, defendants have booked billions of dollars’ worth of fictitious transactions through two Nigerian subsidiary companies Mmobuosi founded and controls, reporting hundreds of millions of dollars of non-existent revenues and assets.”
In June, US-based forensic financial research firm Hindenburg Research alleged Tingo Group had been involved in accounting frauds, misrepresentation and tax delinquency, causing the company’s share price to fall by about half on Nasdaq, where the stock is quoted, on that single day.
Tingo said the allegations were false and that the report was fraught with misleading and libellous content.
Tingo claims Tingo Mobile serves 9 million users in Nigeria, most of whom it said are farmers, with microloans, weather forecasts and an online marketplace.
Charges against 43-year-old Mr Mmobuosi and his companies came a month after the SEC blocked trading in the shares of Tingo Group and Agri-Fintech Holdings for two weeks because of “questions and concerns regarding the adequacy and accuracy of publicly available information” about the companies.
Tingo promised in a website statement to “fully cooperate” with regulators. The complaint also stated that Mr Mmobuosi siphoned off funds for personal benefits.
“Mmobuosi and the entities he controls have fraudulently obtained hundreds of millions in money or property through these schemes,” the SEC document said.
Tingo Group reported $461.7 million in cash and cash equivalents in the bank accounts of its subsidiary Tingo Mobile, according to the SEC. The regulator, however, said the actual balance for the year was below $50.
Deloitte had given Tingo Group a clean bill of health in its audit for the 2022 accounts, causing Hindenburg to question whether the auditing firm had “missed or rushed through procedures”.
The SEC is requesting an order to block the defendants from selling or offloading their stakes in Agri-Fintech or Tingo Group and restricting them and their middlemen from destroying, changing or hiding documents and records.
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In September, the Commonwealth Enterprise and Investment Council (CWEIC), the Commonwealth’s official business network, appointed Mr Mmobuosi as a member of its Global Advisory Council and announced Tingo Group as its strategic partner, noting “his track records and achievements in agricultural financial technology.”
CWEIC described Mr Mmabuosi as a “distinguished Nigerian technology entrepreneur and advocate for technological advancement and social upliftment in Africa and beyond.”
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