The US Securities and Exchange Commission has imposed a $250 million penalty on Nigerian businessman and a former CEO of Tingo Group, Dozy Mmobuosi, for inflating the company’s financial performance.
The SEC’s investigation, which began in 2023, revealed that Tingo Group and its subsidiary, Tingo Mobile, falsely reported substantial revenue and cash reserves.
The actual cash balance of Tingo Mobile’s Nigerian accounts was found to be significantly less than reported, leading to charges of fraudulent financial reporting.
In addition to the fine, Mmobuosi has been barred from serving as a director of any public company.
The SEC’s judgment also enjoins Tingo Group and its associated entities from violating securities fraud provisions.
Despite Tingo Group’s denial of the charges, neither Mmobuosi nor the company presented a defence in the civil complaint, resulting in a default judgment by the court.
It was earlier reported that Mmobuosi was to face charges from the Securities and Exchange Commission of the United States for falsifying financial statements and other records of three Tingo Group companies, including Tingo Mobile and Tingo Foods Plc.
The SEC opened an investigation into Tingo Group in 2023 and filed charges against the company and its CEO in December.
The company, which has often described itself as an agri-fintech and reported millions of dollars in revenue, was listed on the NASDAQ.
According to a statement quoted in The Cable report on Monday, “On August 29, the SEC said the US district court for the southern district of New York entered final judgments against Mmobuosi, also known as Dozy Mmobuosi, and three US-based entities, Tingo Group Inc., Agri-Fintech Holdings Inc., and Tingo International Holdings Inc, on August 28.
“Mmobuosi was accused by the SEC of a multi-year scheme to inflate the financial performance metrics of his companies and key operating subsidiaries to allegedly defraud investors worldwide.
“On December 18, 2023, the SEC charged Mmobuosi for providing “false information to investors,” and “orchestrating a staggering fraud”.
“Two days later, Mmobuosi temporarily stepped down as Tingo Group’s co-CEO.
“A month before he stepped down, the SEC suspended trading in the securities of Tingo Group.”
The US SEC said, “The SEC alleged that the company inflated its financial performance. One of its subsidiaries, Tingo Mobile, reported cash and cash equivalents of $461.7 million for 2022 in its Nigerian bank accounts, but its actual bank balance was less than $50.
“The judgments, entered on the basis of default, enjoin Mmobuosi, Tingo Group, Agri-Fintech Holdings, and Tingo International Holdings from violating the anti-fraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.“
On August 27, 2024, Mmobuosi told The PUNCH that the said multimillion-dollar fraud allegations levelled against him were baseless.
Mmobuosi stated this during a press conference at the Tingo House on Victoria Island, Lagos.
Despite Tingo’s denial of the charges, the company and its CEO did not enter a defense in the civil complaint, said the Financial Times.
“Judge Jesse M. Furman of the US District Court for the Southern District of New York ordered Mmobuosi and his three US-based entities to pay more than $250mn in fines.”
Despite its grand claims, Tingo has long been regarded as curious, given how little was known about the company.
The practices of Mmobuosi’s companies attracted significant scrutiny last year when Hindenburg Research, a US-based short-seller, released a report that labelled Tingo Group as an “exceptionally obvious scam.”
The report caused Tingo’s stock price to plummet by more than 60 per cent on the day of the release and raised serious questions about the legitimacy of Mmobuosi’s operations.
The SEC’s charges against Mmobuosi and his companies were filed shortly after the agency suspended trading in the shares of Nasdaq-listed Tingo Group and Agri-Fintech Holdings.
The SEC cited, “questions and concerns regarding the adequacy and accuracy of publicly available information” as the basis for the trading suspension, further eroding investor confidence in the firms.
Mmobuosi rose to prominence and gained international attention in early 2023 with his bid to purchase Sheffield United.
This club had been competing in the English Premier League but has since been relegated to the second tier of English football. The proposed acquisition, which never materialised, was part of Mmobuosi’s broader strategy to position himself as a global business leader.
On February 5, 2023, mystery surrounded the wealth of Sheffield United‘s proposed new owner, Mmobuosi after it emerged that the value of his tech company plummeted by around $8 billion (£6.7 billion) in the past year.
Mmobuosi has been described as a billionaire whose reported £90 million takeover of the stricken Championship club could rescue them from financial dire straits.
