Dozy Mmobuosi, a Nigerian businessman who made headlines for his attempted acquisition of an English football club, has been ordered to pay over $250 million in fines by a US federal court. This comes after the US Securities and Exchange Commission (SEC) charged Mmobuosi with fraud for allegedly inflating the financial performance of his companies.
According to the report, Judge Jesse M Furman of the Southern District of New York issued the final judgment by default against Mmobuosi and his companies, including Tingo Group, Agri-Fintech Holdings, and Tingo International Holdings, after the businessman failed to respond to the SEC’s civil complaint.
The SEC had accused Mmobuosi of fraudulently inflating the “financial performance metrics of his companies and key operating subsidiaries to defraud investors worldwide.” The judge noted that Mmobuosi and his firms had “failed to answer, plead, or otherwise defend” themselves in the case, leading the SEC to describe Mmobuosi’s business empire as a “fiction.”
Tingo, Mmobuosi’s fintech group, had claimed to have over 9 million customers in Nigeria and a food processing business. However, the SEC’s complaint stated that the “purported assets, revenues, expenses, customers and suppliers” of Tingo were “virtually entirely fabricated,” with the scale of the fraud being “staggering.” The SEC found that despite Tingo reporting $461.7 million in cash for 2022, the company’s actual balance was less than $50.
This revelation comes after Hindenburg Research, a US short seller, had previously labeled Tingo as an “exceptionally obvious scam,” leading to a dramatic drop in its stock price. The SEC’s charges were made after trading was halted in the shares of Tingo Group and Agri-Fintech Holdings due to concerns about the accuracy of their public information.
Mmobuosi gained attention last year with his bid to acquire Sheffield United, a Yorkshire-based football club that recently fell to the second tier of English football. However, the Nigerian businessman and his companies have not yet responded to requests for comment on the court ruling.
The SEC’s investigation uncovered several irregularities in Mmobuosi’s background and claims. For instance, the regulator found that Mmobuosi’s biographical claim of developing the first mobile payment app in Nigeria was “totally false” and a “pure lie,” according to the actual creator of the app, Deji Oguntonade.
Additionally, Mmobuosi’s claim of having received a PhD in rural advancement from a Malaysian university, UPM, in 2007 was also found to be false, as the school confirmed that no one by his name was found in their verification system.
In 2017, Mmobuosi was also arrested and faced an 8-count indictment over the issuance of bad checks, according to the Economic and Financial Crimes Commission, Nigeria’s anti-graft agency. He later settled the case in arbitration.
The court’s decision to impose a $250 million fine on Mmobuosi and his companies serves as a stark warning against fraudulent practices in the financial sector. This case highlights the importance of thorough due diligence and the need for investors to be cautious when evaluating investment opportunities, especially those involving foreign entities.
As the dust settles on this case, the Nigerian business community will be closely watching to see how Mmobuosi and his companies respond to the court’s ruling and whether this incident will have any broader implications for the country’s financial landscape.
