Tingo Group shares plunge by over 50% following Hindenburg Research’s falsified financial allegations

The shares of Tingo Group, founded by Dozy Mmobuosi, lost over 50% of its value on NASDAQ after a Hindenburg Research report calling the company an “obvious scam” with alleged falsified financials.

The US-based short seller made serious allegations in a report about the company and its founder, Dozy Mmobuosi. The report highlighted “red flags” with Dozy Mmobuosi’s background, and described irreconcilable financial statements and other unverifiable and unsubstantiated claims made by the company.

Summarily it stated that “we believe the company is an exceptionally obvious scam with completely fabricated financials.” Based on this, it said it has taken a short position in shares of Tingo Group Inc.

Founded in 2001, Tingo Group, Inc. is a global Fintech and Agri-Fintech group of companies with operations in Africa, Southeast Asia and the Middle East. Tingo Group’s wholly owned subsidiary, Tingo Mobile, is the leading Agri-Fintech company operating in Africa, with a comprehensive portfolio of innovative products, including a ‘device as a service’ smartphone and pre-loaded platform product.

Tingo Group’s other Tingo business verticals include: TingoPay, a SuperApp in partnership with Visa that offers a wide range of B2C and B2B services including payment services, an e-wallet, foreign exchange and merchant services; Tingo Foods, a food processing business that processes raw foods into finished products such as rice, pasta and noodles; and Tingo DMCC, a commodity trading platform and agricultural commodities export business based out of the Dubai Multi Commodities Center.

Some of the allegations in the report are as follows:

• that he appears to have fabricated his biographical claim to have developed the first mobile payment app in Nigeria, Flashmecash. The app’s actual creator, Deji Oguntonade, called Mmuobuosi’s claims a “pure lie”;
• that Dozy’s claim of receiving a PhD in rural advancement from a Malaysian university in 2007 was false as the school was contacted to verify the degree. The school wrote back saying no one by his name was found in their verification system;
• that in 2017, Dozy was arrested and faced an 8-count indictment over issuance of bad checks, according to the Nigerian Economic and Financial Crimes Commission. He later settled the case in arbitration.
• that in 2019, Dozy claimed to have launched “Tingo Airlines” and posted social media messages encouraging customers to “fly with Tingo Airlines today”. Media outlets later uncovered that Tingo had photoshopped its logo onto pictures of airplanes. Dozy later admitted to never owning any actual aircraft.
• that the 7 month-old Tingo’s food division claimed to have generated $577.2 million in revenue last quarter alone, representing 68% of total reported revenue. If accurate, its claimed 24.8% operating margins would exceed those of every major comparable food company. Yet, Tingo has no food processing facility of its own. Rather, it claims its explosive revenue and profitability is derived from acting as a middleman between Nigerian farmers and an unnamed third-party food processor.
• that Tingo claimed its mobile handset leasing, call and data segments generated $128 million in revenue last quarter (~15% of total), claiming these services are provided through an agreement with Airtel in Nigeria. The type of license they claim did not exist until June, 2023. However checks with the Nigerian Communications Commission showed it has no record of Tingo being a mobile licensee at all, despite company claims of having 12 million mobile customers.
• that Tingo claims its “seed to sale” online marketplace called NWASSA generated $125.3 million in revenue last quarter or ~15% of its total revenue, yet the website has been “under maintenance” and inoperable for months. Tingo also claimed to have launched its NWASSA platform in Ghana. The Ghana website also doesn’t work and just says “Updating…” without ever going anywhere.

Summarily, Hindenburg in its report stated that “overall, we think Tingo is a worthless and brazen fraud that should serve as a humiliating embarrassment for all involved. We do not expect the company will be long for this world.”

In a swift rebuttal, Tingo issued a statement on its website stating that “the report, which contains numerous errors of fact, together with misleading and libellous content, appears to be a deliberate attempt to undermine the positive work that Tingo Group is undertaking across various worldwide markets.”

“As disclosed by Hindenburg Research, the report represents their own opinion, and is designed to benefit a short position taken by them and their associates from which they stand to realize sizeable gains. The Company can confirm that no attempt was made by Hindenberg Research to verify the allegations or otherwise make genuine inquiries concerning the information provided in the report prior to its release.”

“Tingo Group confirms that it remains in compliance with the laws of the territories in which it operates and maintains the highest standards of corporate governance. The Company also confirms that its accounting records are accurate and correct and that its financial results are accurately reported within its financial statements and its SEC filings. The investor community has demonstrated its faith in Tingo Group on the basis of detailed analyses and reports prepared by leading professional advisors, financial experts and credit rating agencies. Tingo Group will respond in detail to the allegations made by Hindenburg Research in due course, but for the avoidance of doubt, the Company believes the report published today is a deliberate attempt to damage its reputation maliciously and unlawfully through the issuance of false, misinformed and distorted information for Hindenburg Research’s own financial gain and at the expense of the Company’s shareholders.”

Tingo is the the short seller’s fourth target so far this year. Others include Indian conglomerate Adani Group, Jack Dorsey’s Block, and Carl Icahn’s flagship Icahn Enterprises.