Dozy Mmobuosi, the founder and former CEO of Nigeria’s Tingo Group, has been ordered by the U.S. Securities and Exchange Commission (SEC) to pay a staggering $250 million in penalties for inflating his company’s financial performance.
This ruling, issued by the U.S. District Court for the Southern District of New York, follows a default judgment against Mmobuosi and three affiliated entities, including Tingo Group Inc., Agri-Fintech Holdings Inc., and Tingo International Holdings Inc.
Read also: First Bank sacks 100+ employees after ₦40bn fraud, freezes their accounts
Sec investigates: Tingo Group’s financial fallout
The SEC’s investigation into Tingo Group began in 2023 and revealed that the company and its subsidiary, Tingo Mobile, had falsely reported substantial revenue and cash reserves. Specifically, Tingo Mobile claimed to have cash and cash equivalents of $461.7 million for the fiscal year 2022, while the actual balance was found to be less than $50. This discrepancy led to accusations of a multi-year scheme to mislead investors globally.
In December 2023, the SEC charged Mmobuosi with providing false information to investors and orchestrating a significant fraud.
Despite the severity of the allegations, neither Mmobuosi nor Tingo Group mounted a defence in the civil complaint, resulting in the court’s default judgment. The SEC’s ruling prohibits Mmobuosi from serving as a future director of any public company.
Mmobuosi’s perspective: A call for fair treatment
Following the court’s decision in the case, Mmobuosi has come out in the open to accuse the SEC of persecuting him and described their charges as a miscarriage of justice.
He said that the commission’s charges are baseless since they have no facts to back their claims and noted that they knew that he and his companies would not be able to defend themselves due to a lack of adequate capital.
Mmobuosi also accused the SEC of withholding material information from the court, such as a report from the Nigerian inspector general of police, stating that the operations of Tingo were valid.
Nevertheless, the company is set on realising its objective at Tingo Group. The man at the centre of it all, Mmobuosi, pointed out that the company has been a light to many communities in Nigeria.
In terms of the case, he said that he wants to go on fighting for the company and its shareholders amid such problems.
Read also: NDPC sanctions Fidelity with #555.8m for data breach
Reputation recovery: Lessons from Tingo Group
The implications of this ruling are far-reaching to Tingo Group, especially after they were accused of fraud. The company that has claimed itself as the leading agri-fintech in Nigeria has seen its stock market value fall and its reputation tarnished.
The actions of the SEC and the forming court decision are useful lessons in terms of the disputable role of corporate transparency and accountability.
While Tingo Group aims through such seas, the future could be secured now. The company will have the challenging task of regaining the trust of the investors and shareholders and dealing with the severe accusations that resulted in Mmobuosi’s severe penalties.
An unfavourable ruling made by this case will leave a lasting impression on the operations of Tingo Group and its position within Nigeria’s highly competitive agri-fintech sector and beyond.