Deeper Details Capture How Tingo Execs Brazenly Built A House Of Cards

The tech and finance world has been rocked by recent developments that have placed a controversial Nigerian businessman and obscure Nigerian subsidiaries of a purported booming business empire on the receiving end of criminal proceedings.

Deeper details of the allegations of misconduct and fraud reveal a sham as blatant as it is baffling, shedding further light on discrepancies and findings of dubious claims first uncovered by WT and subsequently exposed by a US investment research firm that had gone short on the Nigerian-born US-listed company that went public via a reverse merger. 

The US Securities and Exchange Commission (SEC) has brought charges against Mmobuosi Odogwu Banye (AKA Dozy Mmobuosi), the CEO at the helm of Tingo Group and its affiliated entities; Agri-Fintech Holdings, and Tingo International Holdings. These entities, purportedly catering to millions in Nigeria’s tech and agriculture sectors, stand accused of orchestrating ‘massive fraud’; artificially inflating revenues, assets, and purported user numbers.

The SEC’s complaint, filed on Monday—a month after the SEC halted trading in Tingo Group and Agri-Fintech Holdings’ securities due to doubts about the accuracy and sufficiency of publicly available information concerning both entities—unearths a scheme dating back to 2019, with Mmobuosi reportedly orchestrating a fabrication of booming financial success.

Notably, Tingo Group’s fiscal year 2022 results reported a substantial USD 461.7 M in cash equivalents in Nigerian accounts. Shockingly, these accounts purportedly held less than USD 50.00 in reality, a discrepancy underscoring the depths of deception.

Deeper details

Mmobuosi allegedly initiated a fraud centred around Tingo Mobile, a Nigerian entity he founded. From 2019, falsified financial records depicted Tingo Mobile as a flourishing enterprise, boasting vast annual revenues, profits, and a substantial user base of farmers. In stark contrast, investigations revealed the company had no meaningful operations or customers and about USD 15.00 in its bank account.

Furthermore, Mmobuosi used false financials to sell Tingo Mobile to two public companies at overvalued prices through all-stock mergers, the SEC alleges in the filed charges. These valuations, exceeding USD 1 B each time, were supported solely by fabricated financial statements. This allowed Tingo Mobile access to U.S. capital markets and enabled Mmobuosi to acquire substantial shares in the merged entities for himself and his affiliates.

The SEC also stated that its findings showed Mmobuosi deceived investors by merging Tingo Mobile into Agri-Fintech and Tingo Group, fabricating transactions that inflated reported sales, earnings, and assets. These false representations led to exaggerated valuations of the companies’ shares and Mmobuosi’s stake.

Additionally, it is alleged that Mmobuosi and the Nigerian entities, the named defendants in the complaint, forged bank statements, altered documents, and bought domain names to impersonate fake suppliers and customers. They used these tactics to deceive auditors and confirm false balances with Agri-Fintech and Tingo Group.

More findings

In early 2023, Mmobuosi created Tingo Foods PLC, mirroring the fraudulent practices of Tingo Mobile. Fabricating a non-existent customer base with forged documents, he sold Tingo Foods to Tingo Group for over USD 200 M, compounding the fraud by adding its fabricated financials to Tingo Group’s reports, the SEC alleges.

In the middle of this year, a research report prepared by short seller Hindenburg labelled Tingo Group an “obvious scam” with fake financials, leading to a 48 percent and 81 percent drop in share prices for Tingo Group and Agri-Fintech, respectively. Following the report, Tingo Group has steadfastly denied the accusations, doubling down on its non-existent businesses and fabricated revenues, notes the complaint. In a surprising move, Tingo Group also appointed Mmobuosi as co-CEO in September 2023.

Agri-Fintech and Tingo Group are still presenting fake operations as real in public filings, issuing false financial statements, the Commission says, and withholding or providing deceptive information to the SEC.

The regulator notes that while this continues, Mmobuosi is earning millions through illegal insider sales of Agri-Fintech and Tingo Group shares and misusing Tingo Group’s assets for lavish personal expenses. One such notable splurge was the botched bid to acquire Sheffield United, an English football club currently competing in the top-tier Premier League.

End of the road?

The charade unpacked at Tingo, observers noted, wasn’t shrouded in complexity or intricate deceit. Rather, it was a brazen facade constructed through falsified bank statements, forged documents, and hollow operational claims. The stark contrast between reported figures and actual bank balances underscores the boldness of the alleged fraud.

Nevertheless, doubts have long trailed the legitimacy of Tingo’s claimed user base of 9 million Nigerian farmers, as WT first reported, and evidence of the existence of its purported mobile services and food processing business remains elusive. While Mmobuosi and other executives remain hard to reach for comments, one British Tingo official previously gave an interview to WT, making several claims that could not be substantiated.

Moreover, the involvement of a Big Four auditor, Deloitte, in giving an unqualified audit to Tingo Group’s 2022 accounts raises questions about the efficacy of auditing practices in uncovering fabrications.

Among the reactions and sentiments following news of the charges is a reminder of the vulnerability of markets to such deceitful practices emphasizing the imperative need for robust regulatory oversight and due diligence.

The SEC’s action, seeking injunctive relief and stringent penalties against the accused, including Mmobuosi and potentially some foreign colleagues, underscores the gravity of financial deception and the resolve to hold perpetrators accountable.