The SEC charged Tingo Group, a Nigerian “agri-fintech” company with “massive fraud” this week, claiming that almost every aspect of the company – including its partners and its financials – was fabricated. Short seller Hindenburg Research had written about the company on June 6, calling it “an exceptionally obvious scam with completely fabricated financials”.
In a release out Monday, the SEC announced that it obtained a temporary asset freeze, restraining order, and other emergency relief against the company’s founder Dozy Mmobuosi for running an “alleged multi-year scheme to inflate the financial performance metrics of his companies and key operating subsidiaries to defraud investors worldwide”.
“Mmobuosi spearheaded a scheme to fabricate financial statements and other documents of the three entities, Tingo Group Inc., Agri-Fintech Holdings Inc., and Tingo International Holdings Inc. and their Nigerian operating subsidiaries,” the SEC wrote in a release earlier this week.
Among the more egregious examples of fraud the SEC alleged was the company claiming to have $461.7 million in cash when it had only $50 in its bank accounts:
Tingo Group’s fiscal year 2022 Form 10-K filed in March 2023 reported a cash and cash equivalent balance of $461.7 million in its subsidiary Tingo Mobile’s Nigerian bank accounts. In reality, those same bank accounts allegedly had a combined balance of less than $50 as of the end of fiscal year 2022.
“Defendants also fabricated the customer relationships that formed the basis of their purported businesses,” the SEC alleged. “Mmobuosi and the entities he controls have fraudulently obtained hundreds of millions in money or property through these schemes.”
Antonia M. Apps, Regional Director of the SEC’s New York Regional Office, commented: “As alleged, Mmobuosi spearheaded a brazen scheme using phony records and fictitious entities to make the Tingo companies he controlled appear highly profitable, so that he could hoodwink investors and reap massive benefits at their expense. We filed this emergency action to expose Mmobuosi’s fraud and hold him accountable, while protecting investors from further harm.”
Hindenburg’s Nathan Anderson noted that Deloitte Israel gave Tingo a clean audit opinion for 2022 and was seeking to work with the company for 2023. He called it an “astonishing audit failure” for a Big 4 firm.
“We think Tingo is a worthless and brazen fraud that should serve as a humiliating embarrassment for all involved,” Hindenburg wrote at the end of their June report. Tingo responded shortly thereafter that the Hindenburg report was full of “misleading and libellous content”.