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The US Securities and Exchange Commission has charged a Nigerian businessman who bid for an English Premier League football club with “massive fraud”, alleging that he and his three companies inflated their financial metrics to defraud investors.

The SEC alleged on Monday that Dozy Mmobuosi, head of Tingo Group, Agri-Fintech Holdings and Tingo International Holdings, had led a scheme that fabricated their financial statements and those of their Nigerian affiliates, Tingo Mobile Limited and Tingo Foods.

“The scope of the fraud is staggering,” the SEC wrote in the complaint. “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 non-existent revenues and assets.”

The charges were filed a month after the SEC suspended trading in the securities of Tingo Group and Agri-Fintech Holdings because of “questions and concerns regarding the adequacy and accuracy of publicly available information” about both companies. In addition to Mmobuosi, Agri-Fintech, Tingo International Holdings and Tingo Group were also charged.

Mmobuosi and his representatives, as well as Tingo Group, the parent company of the three charged entities, could not immediately be reached for comment.

Tingo is a fintech company that says it services 9mn users in Nigeria, whom it says are mostly farmers. In addition it runs a food processing business. But its operations came under scrutiny after a report by US-based short seller Hindenburg in June alleging that it was a fraud sent its stock price crashing.

Hindenburg revealed it had placed a bet against the fintech and raised a number of “red flags” about the company which it described as an “exceptionally obvious scam”. Shares in Tingo, which had a market value of more than $400mn before the report was published, fell by as much as 60 per cent that day.

According to the SEC, the group reported cash and cash equivalents of $461.7mn for 2022 in the bank accounts of its Nigerian subsidiary, Tingo Mobile, which says it provides farmers in Nigeria with microloans, weather forecasts and an online marketplace. But the US watchdog claims the actual balance was less than $50 for that financial year.

Hindenburg had in June questioned the existence of the majority of Tingo’s 9mn users, flagging that it did not have the mobile license required to operate the business, had inactive websites, and a seemingly non-existent food processing site.

Mmobuosi gained attention in the UK in February after submitting a bid to buy football club Sheffield United, which ultimately failed.

Big Four auditor Deloitte gave the fintech a clean, unqualified audit for its 2022 accounts, leading Hindenburg to question whether the firm had “missed or rushed through procedures”.

Deloitte Israel, which conducted the audit, and its chief executive Ilan Birnfeld, did not immediately respond to requests for comments.

In May, when the Financial Times visited Tingo’s offices in Lagos, Nigeria, they were thinly staffed in a rundown building. The Nigeria chief executive and head of technology failed to provide details on the type of license the company held with regulators in the country’s tightly regulated finance sector. The Dubai office, located in the Jumeirah Lake Towers, which houses the Dubai Multi Commodities Centre free-trade zone, was empty when an FT reporter visited in June.

Tingo’s executives include Chris Cleverly, who is a cousin of British home secretary James Cleverly and a barrister in the UK with experience working on “white-collar fraud and organised transnational crime cases”, according to his chambers. Chris Cleverly did not immediately respond to a request for comment.

Additional reporting by Stefania Palma in Washington

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The post SEC charges fintech Tingo chief with ‘massive’ fraud after Hindenburg short position appeared first on WorldNewsEra.

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