- A U.S. market research firm is warning investors about Tingo Group Inc. (NASDAQ:TIO), calling it an “obvious scam”
- Hindenburg Research accuses Tingo of “completely fabricated financials”
- New Jersey-based Tingo calls itself an agri-fintech company and claims to offer diversified business interests in mobile phones, food processing, and online food marketplace primarily in Nigeria
- Hindenburg detailed several major red flags it found with the company and its CEO, “Dozy” Mmobuosi
- Tingo Group Inc. opened trading at US$1.35 per share and has fallen nearly 54 per cent by midday trading
A U.S. market research firm is warning investors about Tingo Group Inc. (NASDAQ:TIO), calling it an “obvious scam.”
In its report that shorts the company, titled “Fake Farmers, Phones, and Financials – The Nigerian Empire That Isn’t,” Hindenburg Research accuses Tingo of being an “exceptionally obvious scam with completely fabricated financials.”
New Jersey-based Tingo calls itself an agri-fintech company and claims to offer diversified business interests in mobile phones, food processing, and online food marketplace primarily in Nigeria.
Hindenburg detailed several major red flags it found with the company’s CEO, “Dozy” Mmobuosi, stating that he appeared to have fabricated his biographical claim to have developed the first mobile payment app in Nigeria. Hindenburg contacted the app’s actual creator, who called these claims “a pure lie.”
The report pointed to several inconsistencies it uncovered while investigating the company’s operations, such as a $150 million agreement with U.K. business Evtec Energy this past spring, to build solar panels for its “non-existent food processing facility.” Hindenburg found filings that revealed Evtec was “dormant” as of its most recent annual report and didn’t have any cash in the bank.
As for that facility, the report goes into further detail – “In February 2023, the company held a groundbreaking ceremony for a planned $1.6 billion Nigerian food processing facility of its own, attended by the country’s agriculture minister and other political luminaries. We found that the rendering of the planned facility, featured in Tingo’s investor materials and on a billboard at the ceremony, is actually a rendering of an oil refinery from a stock photo website (pictured above). Following its groundbreaking, Tingo reported in a May 2023 SEC filing that it made “significant progress” on the facility, including laying “the foundations of its numerous buildings.” We visited the site a week later and found zero signs of progress; it was empty except for the plaque and billboard commemorating the groundbreaking ceremony, surrounded by weeds.”
Hindenburg also alleged that the company’s claims about its telecommunications business are fraudulent, and that its revenue claims relating to its food business are untrue.
“Tingo’s cash flow and balance sheet statements do not reconcile and show major errors indicating a complete lack of financial controls. Its cash flow statements regularly subtract items from cash that should be added and vice versa.”
The report also stated that in April 2023, Tingo’s co-chairman wrote a public letter to Dozy, filed with the SEC, stating he could not approve the company’s annual report stating it was “necessary to recuse myself by resigning” because of “many critical questions, comments and recommendations” that went “unanswered and unheeded.” Thanks to the Hindenburg report, other law firms, such as Rosen Law, are coming out of the woodwork to investigate Tingo, with Rosen’s team encouraging investors who lost US$100,000 or more to come forward and a class-action securities investigation could be next.
On Tuesday, shareholder rights law firm, Johnson Fistel, LLP announced it was investigating Tingo to determine whether investors who suffered significant losses on their investment could recover their money under federal securities laws.
Tingo Group Inc. opened trading at US$1.35 per share and has fallen nearly 54 per cent by midday trading. While its stock has risen 82.7 per cent since this time last year, it has fallen 56.8 per cent this past month from its peak when it announced it was set to join the broad-market Russell 3000 Index later this month.
The company is planning a special meeting of stockholders for June 7 as well as a question and answer session that should be interesting, to say the least. For more details on this meeting, click here.
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