The U.S. Securities and Exchange Commission (SEC) has imposed a $250 million penalty on Dozy Mmobuosi, the former CEO of Tingo Group, a Nigerian company, for inflating the company’s financial performance figures.
The SEC’s investigation, which commenced in 2023, uncovered that Tingo Group and its subsidiary, Tingo Mobile, had falsely reported their revenue and cash reserves. The actual cash balance of Tingo Mobile’s accounts in Nigeria was found to be far less than the reported figures, leading to accusations of fraudulent financial reporting.
In addition to the substantial fine, Mmobuosi has been prohibited from serving as a director for any public company. The SEC’s ruling also prohibits Tingo Group and its associated entities from breaching securities fraud regulations.
Despite Tingo Group’s denial of the allegations, neither Mmobuosi nor the company responded to the civil complaint, resulting in a default judgment by the court.
On December 18, 2023, Mmobuosi faced charges from the SEC for falsifying financial statements and records related to three Tingo Group companies, including Tingo Mobile and Tingo Foods Plc.
The SEC launched an investigation into Tingo Group in 2023, and charges were filed against both the company and its CEO in December. Tingo Group, which has often presented itself as an agri-fintech company and reported significant revenue, was listed on NASDAQ.
According to a statement cited by The Cable, on August 29, the SEC announced that the U.S. District Court for the Southern District of New York had issued final judgments against Mmobuosi and three U.S.-based entities: Tingo Group Inc., Agri-Fintech Holdings Inc., and Tingo International Holdings Inc., as of August 28.
The SEC accused Mmobuosi of engaging in a multi-year scheme to exaggerate the financial performance metrics of his companies and key subsidiaries, thereby allegedly defrauding investors globally. The charges, filed on December 18, 2023, included accusations of providing false information to investors and orchestrating significant fraud.
Two days after the charges were filed, Mmobuosi temporarily stepped down as co-CEO of Tingo Group. A month before his resignation, the SEC had suspended trading of Tingo Group’s securities.
The SEC alleged that Tingo Group had inflated its financial performance. For example, Tingo Mobile reported $461.7 million in cash and cash equivalents for 2022 in its Nigerian accounts, while the actual balance was under $50.
The judgments, made on the basis of default, prohibit Mmobuosi, Tingo Group, Agri-Fintech Holdings, and Tingo International Holdings from violating anti-fraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934.
On August 27, 2024, Mmobuosi claimed that the fraud allegations against him were unfounded, expressing his position at a press conference at Tingo House on Victoria Island, Lagos.
Despite Tingo’s denial of the charges, the company and its CEO did not mount a defense in the civil suit, according to the Financial Times. Judge Jesse M. Furman of the U.S. District Court for the Southern District of New York ordered Mmobuosi and the three U.S. entities to pay over $250 million in fines.
Tingo has long been viewed with suspicion, with minimal public knowledge about the company. The scrutiny intensified following a report from Hindenburg Research, a U.S.-based short-seller, which labeled Tingo Group as an “exceptionally obvious scam.” This report caused Tingo’s stock price to drop by over 60% on the day of its release, raising significant concerns about the legitimacy of Mmobuosi’s operations.
The SEC’s charges came shortly after it suspended trading in the shares of Nasdaq-listed Tingo Group and Agri-Fintech Holdings, citing concerns about the adequacy and accuracy of publicly available information, which further undermined investor confidence.
Mmobuosi gained international attention in early 2023 with his attempt to acquire Sheffield United, a club that had recently been relegated from the English Premier League to the Championship. This proposed acquisition was part of Mmobuosi’s broader strategy to establish himself as a prominent global business leader. However, by February 5, 2023, it was reported that the value of his tech company had decreased by approximately $8 billion (£6.7 billion) over the previous year.