Nigerian businessman’s Tingo under scrutiny after short seller’s damning research

LAGOS — Tingo Group, a Nasdaq-listed company that claims a wide range of services in agriculture and finance across Africa, the Middle East and Southeast Asia is under scrutiny after a U.S. short seller alleged irregularities that it said raised doubts about the company’s legitimacy.

Hindenburg Research said it had taken a short position on Tingo because “the company is an exceptionally obvious scam with completely fabricated financials.” The assessment was based on what Hindenburg said were false product claims and non-existent facilities.

Tingo’s share price fell more than 50% after the New York-based investment research firm’s report was released yesterday (June 6).

The company said it “refutes all the allegations and misinformation” in Hindenburg’s report, alleging “numerous errors of fact” written to benefit a short position. Tingo scheduled a “special meeting of stockholders” for today. One item on the agenda was the “conversion of Series A preferred stock” according to a presentation, but it is not clear that this meeting occurred. Tingo did not immediately respond to a request for comment.

Hindenburg is best known for shorting shares of the Indian conglomerate Adani Group in January. The group’s value has dropped by $100 billion since. Hindenburg recently wrote a critical report on Icahn Enterprises that said its shares were overvalued.

Tingo Group names food processing, a super app, and a commodity trading platform among its businesses. A subsidiary offers insurance, microfinance and other financial products to farmers through an online marketplace it calls Nwassa.

The company is owned by Odogwu ‘Dozy’ Mmobuosi, a Nigerian who made headlines this year after he announced an interest in buying British football club Sheffield United.

Back in February, the English Football League said it “raised a number of additional queries” about Mmobuosi, and only after those were answered, would a change of ownership be possible.

Hindenburg’s report immediately went viral on Twitter and in African tech WhatsApp groups because there has long been some suspicion about Tingo’s legitimacy. The company seemed to pop out of nowhere when, in February 2022, Bloomberg reported that it was looking to raise $500 million and was already valued at $6.3 billion.

Those numbers were staggering for a company most people had never heard of, especially one that claimed to have been founded 20 years earlier, serve a customer base of 12 million rural farmers in Nigeria, and run an e-commerce platform that processed $4 billion in transactions annually.

“Starting in August 2021, there was chatter within the African venture community that no one had ever heard of Tingo,” Aubrey Hruby, co-founder of Tofino Capital, told Semafor Africa. One long-term African tech investor said he received an inquiry in 2020 about Tingo and that his feedback was not positive. “It didn’t add up to me then based on me asking folks in the agric and mobile space,” he said.

Mystery around Mmobuosi’s past and his supposed ownership of other high-value assets has not helped Tingo’s cause. In 2018, Nigeria’s financial crimes agency planned to arraign him on an eight-count criminal charge but that was apparently later settled, according to Hindenburg. Tingo Airlines, incorporated in the U.K. in 2019, is not known to have completed a single flight anywhere.

Yet, the 45-year-old Lagos-born entrepreneur has maintained an enigmatic public presence. In an interview three weeks ago on Arise News, a private Nigerian broadcaster, Mmobuosi reiterated his ambition to own Sheffield United, saying “the deal is still on.”

A number of U.S. law firms announced investigations into potential securities law violations by Tingo Group, inviting the company’s stockholders to join their class action suits. Boston firm Block and Leviton, Gibbs Law Group in California, and North Carolina-based divorce attorneys Rosen each said they could file a suit to help Tingo investors recover their money.

The Israeli franchise of the professional services firm Deloitte gave Tingo a clean bill of health on its Dec. 31, 2022 financial statement for Tingo Foods, one of the company’s subsidiaries, which reported a $54 million cash balance.

• In August 2021, a company called iWeb Inc said it had bought Tingo Mobile for $3.7 billion. Mmobuosi, designated as Tingo Mobile’s co-founder and owner at the time, was then named CEO of Tingo Inc which supposedly became iWeb Inc’s new name.