US Securities and Exchange Commission (SEC) charges Nigerian CEO of Tingo Group, three companies with fraud

© Reuters. FILE PHOTO: The seal of the U.S. Securities and Exchange Commission (SEC) is seen at its headquarters in Washington, DC, U.S., May 12, 2021. REUTERS/Andrew Kelly/File Photo

ABUJA (Reuters) – The U.S. Securities and Exchange Commission (SEC) on Monday filed charges against Nigerian businessman Dozy Mmobuosi and three companies he is the chief executive of, alleging they inflated the financial performance of the companies and key subsidiaries to deceive investors.

In a statement, the SEC said it had filed charges in US District Court in New York against Mmobuosi, who made headlines this year after offering to buy an English Premier League team. The SEC also charged Tingo Group, Agri-Fintech Holdings and Tingo International Holdings with violating anti-fraud provisions of the federal securities laws and Nasdaq’s reporting and internal controls.

Tingo Group shares plunged in June after short seller Hindenburg Research criticized its founder, claiming the fintech firm had “fabricated” its finances.

Tingo categorically denied all the allegations in the report, saying it was full of “misleading and offensive content”. The company also said it had hired a law firm to conduct an independent review of Hindenburg’s claims.

The SEC imposed a two-week trading suspension on Tingo Group’s securities on November 14 following an investigation.

Nasdaq announced it would continue to hold the company’s securities pending a review, Tingo Group said in a statement.

Mmobuosi and the companies could not immediately be reached for comment, but Tingo Group said in a statement on its website that it would “cooperate fully” with regulators.

The SEC alleges that since at least 2019, Mmobuosi falsified financial statements and other documents for the three companies and their Nigerian units Tingo Mobile and Tingo Foods.

The complaint further alleges that Mmobuosi made material misrepresentations about his business operations and financial success and siphoned off funds for his own benefit.

“Mmobuosi and the entities he controls fraudulently obtained hundreds of millions in money or property through these schemes,” the SEC said in a statement.

The SEC is seeking emergency relief by freezing Mmobuosi’s assets and prohibiting the three companies from transferring money or assets or issuing Mmobuosi stock.

The SEC is also seeking to enjoin the defendants from selling or liquidating their respective interests in Agri-Fintech or Tingo Group and to enjoin them and their agents from destroying, altering or concealing records and documents.

The SEC’s investigation, overseen by Tejal D. Shah, is ongoing, she said in a statement.