The U.S. Securities and Exchange Commission (SEC) has taken legal action against Nigerian businessman Dozy Mmobuosi and his companies — Tingo Group, Agri-Fintech Holdings, and Tingo International Holdings — for allegedly leading a “massive fraud” scheme.
The charges, filed on Monday, accused the defendants of inflating financial figures, fabricating statements for Nigerian affiliates, and engaging in billions of dollars’ worth of fictitious transactions since 2019.
The SEC’s complaint, revealing what it describes as a “staggering” scope of fraud, comes in the aftermath of the suspension of trading in securities of Tingo Group and Agri-Fintech Holdings just a month ago. This suspension was prompted by concerns regarding the accuracy and adequacy of publicly available information.
Hindenburg’s blow: Tingo Group’s market tumble amidst fraud allegations
Earlier this year, Hindenburg Research, renowned for impacting businesses with its reports, declared a short position in Tingo Group, causing shares to plummet by over 60 percent. The short seller accused Tingo of falsifying financials and questioned Mmobuosi’s claims of developing “Nigeria’s first mobile payment app.”
Tingo Group, an African agri-fintech enterprise and the parent organization of Tingo Mobile Plc, was founded by Mmobuosi nearly two decades ago with a mission to cater to users in Nigeria, predominantly among the farming community. However, the company came under heightened scrutiny subsequent to a report by Hindenburg, which labeled it an “exceptionally obvious scam.”
The SEC alleges that Tingo reported $461.7 million in cash and cash equivalents for 2022 in its Nigerian subsidiary, Tingo Mobile, while the actual balance was purportedly less than $50 for that financial year. Earlier, Hindenburg had raised concerns about the legitimacy of Tingo’s user base and its operations.
Dozy Mmobuosi’s Sheffield United bid and auditor response
Despite the serious allegations, Deloitte provided an unqualified audit for Tingo’s 2022 accounts. Questions have arisen regarding the thoroughness of the audit, prompting Hindenburg to question whether it was rushed. Deloitte Israel and its CEO Ilan Birnfeld have not immediately responded to requests for comments.
Mmobuosi, who gained attention in the UK with an unsuccessful bid to acquire football club Sheffield United in February, recently faced a setback as the court halted the takeover due to an outstanding county court judgment against him in the UK for failing to pay rent, amounting to £0.030 million ($0.038 million).
The Nigerian businessman holds a 12.1-percent stake in Tingo, valued at over $50 million. The unfolding scandal is casting doubts on the credibility of Tingo Group and its founder, as regulatory bodies and investors closely monitor developments in the alleged fraud case.