Tingo Group, a financial technology company that was the subject of a short seller report, was sued by the US Securities and Exchange Commission for allegedly overstating its financial results in an ongoing fraud of “staggering” scope.
Tingo and two related companies, Tingo International Holdings Inc. and Agri-Fintech Holdings Inc., have booked billions of dollars in false transactions through two Nigerian subsidiaries since 2019, according to the lawsuit, filed Monday in federal court in Manhattan. Tingo reported hundreds of millions of dollars in fake revenues and assets, the SEC alleges.
The regulator accused Tingo’s chief executive officer, Mmobuosi Odogwu Banye, of orchestrating the alleged fraud. In one example, Tingo reported a cash balance of $461.7 million in March when legitimate bank records showed less than $50, according to the suit.
In a June report, short seller Hindenburg Research claimed fraudulent activity by Tingo, causing its share price to fall by 48%. The SEC claims Nasdaq-listed Tingo doubled down on its alleged falsehoods and has continued to fabricate its results in public filings.
A spokesperson for Tingo didn’t immediately respond to a request for comment on the suit.
Tingo offers a smartphone-based platform for African farmers, according to its website. Mmobuosi allegedly pushed the sale of Tingo Mobile, a Nigerian company through which the SEC says the alleged fraud originated, to two public companies based on grossly inflated valuations of more than $1 billion, according to the complaint.
“These material misstatements created the false impression that Tingo Mobile was a thriving, multimillion-dollar business when in fact its operations and earnings were fabricated — causing significant, artificial overvaluation of the companies’ shares and Mmobuosi’s controlling stake in them,” the SEC claims.
It accuses Mmobuosi — who for a time was seen as a potential buyer of English football club Sheffield United — of reaping millions of dollars in illicit profits through illegal insider sales of large blocks of shares he obtained through mergers and “looting Tingo Group’s assets to fund lavish expenses.”
According to the suit, these included luxury cars, private jet travel and an unsuccessful effort to buy an English soccer team.
The case is Securities and Exchange Commission v. Mmobuosi Odogwu Banye, 23-cv-10928, US District Court, Southern District of New York (Manhattan).
This article was originally sourced from www.BNNBloomberg.ca