The U.S. Securities and Exchange Commission (SEC) has thrown the spotlight on a major financial scandal, unveiling charges of “massive fraud” against Nigerian tech executive Dozy Mmobuosi and three associated companies.
The allegations point to a far-reaching scheme aimed at inflating financial metrics, with short seller research playing a pivotal role in bringing the purported deception to the attention of federal authorities.
according moguldom.com, the SEC claims these entities fabricated their financial statements and those of their Nigerian counterparts, Tingo Mobile Limited and Tingo Foods.
READ: News: US Securities and Exchange Commission Halts Tingo Group Trading Amid Fraud Allegations
“The scope of the fraud is staggering,” the SEC stated in its complaint, revealing that since 2019, the defendants have purportedly booked billions of dollars in fictitious transactions through two Nigerian subsidiary companies controlled by Mmobuosi. The companies reported hundreds of millions of dollars in nonexistent revenues and assets.
The charges come on the heels of the SEC’s recent suspension of trading in Tingo Group and Agri-Fintech Holdings securities. The suspension was prompted by concerns surrounding the accuracy and sufficiency of publicly available information about both companies, The Financial Times reported.
Aside from Mmobuosi, the SEC has also targeted Agri-Fintech, Tingo International Holdings, and Tingo Group in its legal action.
Tingo Group is a fintech company that claims to serve nine million users, predominantly farmers, in Nigeria. The company, which also operates a food processing business, was scrutinized following a report by U.S.-based short-seller Hindenburg Research in June. Hindenburg’s report described Tingo as an “exceptionally obvious scam” and raised concerns about its operations, causing Tingo’s stock price to plummet by as much as 60 percent.
The SEC’s investigation and subsequent charges were prompted by Hindenburg’s revelations, which included doubts about the existence of the majority of Tingo’s claimed users, the absence of the required mobile license, inactive websites, and a seemingly nonexistent food processing site.
Mmobuosi, who made headlines in the UK for his failed bid to purchase the football club Sheffield United in February, faces severe allegations of overseeing an extensive fraudulent operation. Big Four auditor Deloitte had previously issued unqualified audits for Tingo Group’s 2022 accounts, prompting further questions about the audit process.
“Since 2019, defendants have booked billions of dollars’ worth of fictitious transactions through two Nigerian subsidiary companies Mmobuosi founded and controls, reporting hundreds of millions of dollars of nonexistent revenues and assets.”
According to the suit, Mmobuosi used the funds to buy luxury cars and private jet travel, Bloomberg reported.
The case is Securities and Exchange Commission v. Mmobuosi Odogwu Banye, 23-cv-10928, US District Court, Southern District of New York in Manhattan.
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