A Nigerian businessman, Dozy Mmobuosi and his companies, Tingo Group, Agri-Fintech Holdings, and Tingo International Holdings, are facing legal action from the U.S. Securities and Exchange Commission (SEC) after being accused of leading a large-scale fraud scheme.

According to the US regulator, Mmobuosi and his companies were involved in the inflation of financial figures, creation of false statements for Nigerian affiliates, and conducting fictitious transactions worth billions of dollars since 2019.

The SEC’s complaint, which was filed on December 18, 2023 highlights the enormous extent of the alleged fraud and follows the suspension of trading in securities of Tingo Group and Agri-Fintech Holdings a month ago due to concerns about the accuracy and adequacy of public information.

Earlier this year, Hindenburg Research, known for its influential reports, took a short position in Tingo Group, leading to a more than 60 percent drop in shares.

Hindenburg accused Tingo of fabricating financials and questioned Mmobuosi’s assertion of creating “Nigeria’s first mobile payment app.”

Tingo Group, an African agri-fintech company and the parent organization of Tingo Mobile Plc, was established by Mmobuosi about twenty years ago to serve users in Nigeria, mainly within the farming community.

However, following a report by Hindenburg labeling it an “exceptionally obvious scam,” the company has come under increased scrutiny.

The SEC claims that Tingo reported $461.7 million in cash and cash equivalents for 2022 in its Nigerian subsidiary, Tingo Mobile, while the actual balance was allegedly less than $50 million for that financial year. Hindenburg had previously expressed doubts about the legitimacy of Tingo’s user base and its operations.

Despite these allegations, Deloitte gave an unqualified audit for Tingo’s 2022 accounts. This has raised questions about the thoroughness of the audit, leading Hindenburg to speculate whether it was hastily done.

Deloitte Israel and its CEO Ilan Birnfeld have yet to respond to requests for comments.

Dozy Mmobuosi, who made headlines in the UK with a failed attempt to buy football club Sheffield United in February, recently suffered a setback when the court stopped the takeover due to an outstanding county court judgment against him in the UK for unpaid rent, totaling £0.030 million ($0.038 million).

Dozy Mmobuosi currently owns a 12.1-percent stake in Tingo, worth over $50 million. The ongoing scandal is casting a shadow over the credibility of Tingo Group and its founder, as regulatory bodies and investors keep a close watch on the developments in the alleged fraud case.

ID/MA

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