Grace Ashiru
Few narratives have captivated industry observers as intensely as the unfolding controversy surrounding Nigerian businessman Dozy Mmobuosi over the past year. Once seen, albeit through his own promotional efforts, as a shrewd figure in the realms of tech and finance, Mmobuosi’s assertions of a thriving business empire have come crashing down amid allegations of extensive fraud. This has led to a federal court order in the U.S. mandating him to pay over USD 250 million in fines and prohibiting him from serving as a director of any public company.
The Final Judgment
The U.S District Court for the Southern District of New York, presided over by Judge Jesse M. Furman has issued a default judgment against Mmobuosi and his companies—Tingo Group, Agri-Fintech Holdings, and Tingo International Holdings, as reported by the Financial Times. The court’s decision followed Mmobuosi’s failure to respond to a civil complaint filed by the U.S. Securities and Exchange Commission (SEC) in December 2023. The complaint alleged that he orchestrated a broad fraud scheme that inflated the financial performance of his companies, deceiving investors globally.
Judge Furman remarked that Mmobuosi and his companies had “failed to answer, plead, or otherwise defend” themselves in this matter. Consequently, the court mandated Mmobuosi and his entities to pay fines surpassing USD 250 million, signaling the conclusion of what the SEC characterized as an “empire of fiction.”
The Unraveling of Tingo Group
Mmobuosi’s decline began with the emergence of Tingo Group, a fintech firm that purported to have over 9 million customers in Nigeria, predominantly farmers. Tingo Group reported impressive revenues, with its subsidiary Tingo Mobile claiming to possess USD 461.7 million in cash equivalents in Nigerian bank accounts for the fiscal year 2022. However, the SEC’s investigation unveiled that these assertions were largely fabricated, revealing that Tingo Mobile’s actual balance was less than USD 50.
The SEC’s complaint illustrated a scheme of deception dating back to 2019. Mmobuosi allegedly utilized falsified financial records to portray Tingo Mobile as a prosperous enterprise. In truth, the company had no significant operations, a minimal customer base, and virtually no cash in its accounts.
The magnitude of the fraud was astonishing. Mmobuosi reportedly sold Tingo Mobile to two public companies at artificially inflated prices, employing fabricated financial statements to rationalize valuations exceeding USD 1 billion each time. These mergers, conducted entirely through stock transactions, enabled Mmobuosi to secure substantial shares in the newly formed entities, which subsequently listed on U.S capital markets.
The Hindenburg Report and Its Aftermath
The decline of Mmobuosi’s empire began in mid-2023 when U.S.-based short-seller Hindenburg Research published a scathing report designating Tingo Group as an “obvious scam.” This followed an earlier May 2022 article by WT that exposed questionable aspects at the core of Tingo. The report underscored the fraudulent nature of the company’s financials, leading to an immediate plunge in the stock prices of Tingo Group and Agri-Fintech Holdings.
In spite of the accumulating evidence against him, Mmobuosi remained defiant, persistently denying the allegations and even appointing himself as co-CEO of Tingo Group in September 2023. Public filings from Tingo Group and Agri-Fintech Holdings continued to portray fictitious operations as genuine, issuing false financial statements and either withholding or providing misleading information to the SEC.
However, the SEC investigations accused Mmobuosi and his companies of forging bank statements, altering documents, and even purchasing domain names to impersonate fictitious suppliers and customers. These strategies were aimed at misleading auditors and fabricating the appearance of a successful business, while, in reality, the entire operation was a precarious structure, as emphasized by investigators.
The Sheffield United Debacle
Further complicating Mmobuosi’s rise and fall was his bold attempt to acquire Sheffield United, an English football club competing in the Premier League at the time. The bid, which ultimately failed, was financed through the same fraudulent methods that characterized his business dealings. The SEC’s complaint indicated that Mmobuosi had misappropriated Tingo Group’s assets for personal expenses, including the unsuccessful acquisition of Sheffield United.
The SEC’s findings unveiled a fraud that was neither sophisticated nor complex but rather a blatant facade built on forged documents and empty claims. This case also highlights the critical significance of regulatory oversight in safeguarding investors from such schemes.
