In a 2020 interview with the Nigerian newspaper Vanguard News, Dr. Dozy Mmobuosi told a reporter that his greatest struggle was with corporate governance. While that might have been true in 2020, today, his greatest struggle appears to be with securities regulators, as last week the SEC announced charges against Dr Dozy and his companies – but the charges do (of course) relate to his struggles with corporate governance.
Last month the SEC halted trading in Tingo Group and Agri-Fintech after finding inaccuracies in their disclosures. Last week they announced charges against Dozy Mmobuosi and three affiliated U.S. entities of which he is the CEO in connection with an alleged multi-year scheme to inflate their financial performance metrics to defraud investors worldwide. And, you are not meant to do that. It’s considered bad corporate governance.
So, what does Tingo do? Well, I’ll let Dozy explain [Clip]
A super app- OK – but that was still a bit confusing, maybe the president of the firm can explain it a bit better. [Clip 2]
OK, well the lawsuit describes how Tingo Group – which is supposed to be a fintech company filed a 10K with the SEC in March this year reporting a cash balance of $461.7 million dollars, while actual bank records in Nigeria show a balance of less than $50 dollars. That would usually be considered a considerable discrepancy.
In the SEC lawsuit Dr. Dozy stands accused of intentionally and materially overstating the reported revenues, expenses, profits and assets of these companies (so basically all of the numbers) in their SEC filings, public statements, and the books and records they have provided to their auditors.
Dozy Mmobuosi – the founder and CEO – has been frequently described by the media as being a tech billionaire. He drew attention to himself earlier this year when he attempted to buy the British soccer team Sheffield United. The deal stalled over questions about whether Dozy’s financial resources were genuine. Meaning that the English Football League were able to spot problems that some investors could not.
The English Football League said in a statement earlier this year that it had received “some evidence of source and sufficiency of funding” but that it had “raised a number of additional queries” and had been “awaiting a response for some time”. It was later reported in the press that Dr. Dozy’s relationship with the club's owner Prince Abdullah had broken down to such an extent that the deal was in major jeopardy.
Dr.Dozy’s wealth mostly came from Tingo group, a US listed holding company, headquartered in New Jersey that claims to have several business lines focusing on providing mobile phones, food processing and an online marketplace for farmers. All of these businesses were primarily operating in Nigeria.
The firm claims to have distributed 9 million branded mobile devices to Nigerian farmers through which the farmers could access banking services, weather forecasts, prices of farming equipment and produce.
Nwassa – the online marketplace claimed to have generated over 100 million dollars in revenue during a quarter when the website had been offline and under maintenance for months – which is impressive. Think how much they would have made if the website had been working. The company had a fully diluted market capitalization of almost $3 billion dollars in May 2023.
The SEC halted trading in these stocks after finding inaccuracies in their disclosures which were brought to their attention by Hindenburg Research, a short selling hedge fund that described the company as an “exceptionally obvious scam”. The SEC wrote in last week’s lawsuit that “Tingo Mobile is a fiction,” saying that “the scope of the fraud is staggering” going on to say that “Its purported assets, revenues, expenses, customers and suppliers are virtually entirely fabricated.”
In today’s video we will dig into how the fraud worked, Dozi Mmobuosi’s background, his fake education, the lies he told, the scandal around his auditor and his links to the British political establishment.
OK, so, Hindenburg Research told the FT that they started investigating Tingo Group after being alerted of the fraud by market participants. They said that the fraud hinged on Tingos Nasdaq listing and the clean audit it received from Deloitte Israel.
Tingo first went public in August 2021 on the OTC market through a reverse merger with a Thai company called iWeb that originally intended to acquire a crypto exchange. Dozy Mmobuosi was listed as the CEO and Chris Cleverly, the cousin of UK Home Secretary James Cleverly became Tingo’s president and board member. Chris Cleverly is a UK barrister whose website says has a background specializing in white collar fraud cases and transnational organized crime cases.
In 2022, the company became Nasdaq listed by closing another reverse merger with a listed Chinese fintech company. The merged entity was renamed Tingo Group Incorporated and the ticker changed from MICT to TIO.
According to the SEC complaint Each merger valued Tingo Mobile at more than $1 billion dollars —valuations which were supported entirely by the fabricated financial statements Mmobuosi crafted and the sham operational success they purported to depict. Through these mergers, Mmobuosi enabled Tingo Mobile to access the U.S. capital markets and, in the process, acquired hundreds of millions of shares in the newly merged entities for himself and entities he controlled.
According to the report, beginning in at least 2019, Mmobuosi (or Dr. Dozy) created fake financial statements and forged documents to falsely portray Tingo Mobile as a thriving and profitable enterprise with hundreds of millions of annual revenue, profit and available cash, and a broad subscriber base of millions of Nigerian farmers using its phones and services. In reality, throughout 2019, (according to the SEC) the company had no meaningful operations or customers and about $15 in its bank account.
It is not obvious that much has changed since then other than the valuation of the company. In June – after the Hindenburg report came out, The Financial Times sent a reporter to visit Tingo’s headquarters in Lagos, where the company’s Nigeria CEO and his chief technology officer are reported to have struggled to answer basic questions, including on the identity of their banking partner. Which would be a big deal for a financial firm.
Similarly, after a press release from Tingo announcing a “multi-billion-dollar pipeline” of commodities exports going through Dubai, the FT sent a reporter to its Dubai office, only to find an empty office. A neighbor told the journalist that a few people occasionally came into the premises, but had not been seen for several days.
Now, of course, none of this prevented Dr. Dozy from living a lavish lifestyle, with exotic cars and private jets. I dunno, maybe you have to fake it till you make it…
So, the SEC is suing Dr. Dozy for using false financial figures and forgeries to effect the two mergers that got Tingo it’s US listing and for perpetrating a fraud on the investing public by knowingly, or with reckless disregard - reporting in SEC filings, press releases, investor presentations and other public disclosures fraudulent and overstated accounts so that he could sell securities to the public.
Not just that, but Dr. Dozy is accused of replicating the entire fraud again in early 2023 with a new entity Tingo Foods. Where there were once again non-existent customers, false bank statements, fake accounts and so on. He then sold this business to Tingo Group for over 200 million dollars.
The SEC alleges that tens of millions of dollars were transferred to Dr. Dozy to fund luxury car purchases, travel on private jets and for the failed purchase of Sheffield United.
The SEC has asked the court to freeze Dr. Dozy’s assets and prohibit the three companies from transferring money, property or shares to him.
The SEC say that the fraud is ongoing and that the Defendants are still preparing and filing false financial statements, still issuing press releases attesting to the accuracy of their false financial results, and have been both withholding information from, and providing false information to the SEC.
Dozy Mmobuosi has been profiled in both Forbes and GQ magazines, on his own website he describes his skillset: Problem Solving 100%, Management 98%, Decision Making 99%, Communication 99%, which at least show an acknowledgment that he is not perfect. My favorite profile of Dr. Dozy is on the Vanguard News website from 2020. He describes how he was a special kid growing up, he discusses his educational background, how he travelled to Malaysia to study for a doctorate in rural advancement. (Rural Advancement?? He’s not a real doctor – is he??) He explains that he was an entrepreneur from the age of 13 or 14. He was a show promoter, ran a magazine, sold secondhand clothes and came up with the idea for an online video website five years before the launch of YouTube. I mean, he has done everything but mentor Steve Jobs…
Dr Dozy says that he was popular at school and earned the nickname, The General. He says that he used to go to insurance companies and banks in Nigeria, giving them all sorts of ideas. I know banks and insurance companies love when teenagers do that. It’s no surprise that he became such a success.
Dr. Dozy explains in the Vanguard News interview how he built the first mobile payment platform in Nigeria as follows:
My brother was in need of some money while in school but he didn’t have a bank account. So my parents had to send the money to someone’s bank account but the person claimed that he never received it. I had to send the money to him through another means after my cousin that worked with a bank confirmed that the transaction my parents initiated was successful.
After that, I thought there are ways instant transfers can happen without the need for a bank account. I had done shows in the past that had banks as sponsors, so I reached out to an official in one of the banks to get his feedback on my idea. I was told that I couldn’t do something like that without a banking license, which, of course, I didn’t have. I told him that I was going to do a proof of concept and show the bank.
We ended up designing an SMS-based platform for cash transfers. Back then, mobile phone penetration was very low which meant the idea wasn’t really viable at the time and we had to wait a bit. When mobile phone penetration started picking up, we went back to pitch the idea and developed it for them.
The product was simply allowing people to send money through SMS and the money could be claimed over the counter at the bank even when the recipient didn’t have a bank account. Understandably, I can’t mention the product or the bank in question for the sake of confidentiality.
I am sure you will agree with me that that is all very impressive, but unfortunately it appears to be entirely untrue. He couldn’t mention the name of the bank, because he had made up the entire story.
When Hindenburg Research started looking into Dr. Dozy. They contacted the university in Malaysia to verify Dr. Dozy’s degree, receiving a reply that no one by his name was found in their verification system. Oh no, he is not a real doctor…
Hindenburg reached out to FlashMeCash - Nigeria’s first mobile payment app, which his website said he was the creator of. They were informed that Dozy’s claims were “totally false” and they were able to verify this by looking up the patent which did not show his name.
Hindenburg discovered in their research that Dozy had been arrested and had faced an 8-count indictment over the issuance of bad checks, according to the Nigerian Economic and Financial Crimes Commission – who seem to have posted about it on their Facebook page…
At this point, the lies just get ridiculous. In 2019, Dr. Dozy announced the launch of “Tingo Airlines” but media outlets in Nigeria revealed that he had just Photoshopped a logo on pictures of airplanes – which is not really the same as launching a new airline. Nonetheless he urged customers to fly with Tingo Airlines today.
Tingo claimed that its payment group had a point of sale system and other merchant products. But Hindenburg found that they had just taken photos from the internet of point of sales handsets and photoshopped their logo onto them.
As the research went on, it looked worse and worse. Despite claiming to have 12 million mobile customers in Nigeria, Tingo, it turns out doesn’t even have a license from the Nigerian Communications Commission to sell mobile phones.
Tingo’s food division claimed to generate more than half a billion dollars in revenue in just one quarter but doesn’t actually have a food processing facility. They did have a groundbreaking ceremony for a food processing facility which was, attended by the country’s agriculture minister and the rendering of the planned facility on the billboard at the ceremony, was later found to be a rendering of an oil refinery from a stock photo website. Which is close enough I guess…
The list of lies, forgeries and photoshopped nonsense is so long that I can’t fit it all in the video. I’ve posted a link to the SEC lawsuit and the Hindenburg report in the video description if you want to read more of the details.
Possibly the dumbest part of the story is that earlier this year Tingo claimed its new agricultural export business, was on track to deliver over $1.34 billion dollars in exports by the third quarter, which is higher than the entire nation of Nigeria’s annual 2022 agricultural exports. Dr Dozy should possibly update his website to say Problem Solving 100%, Agricultural exports, 500%.
To quote the FT “The charges against Tingo are another blow to the reputation of fintech “superapps”, which have emerged in the past decade and sought to disrupt banking by offering payments and other services such as instant messaging and trading. I would have to agree with this, but at least Dr Dozy didn’t make the claim that [Clip]
As the people at Hindenburg point out, this was not an unusually sophisticated fraud. Most of the lies were easy to disprove, it just took Hindenburg a few phonecalls or an office visit. Amusingly, when Hindenburg investigators visited Tingo’s office in Nigeria, they found a mostly empty office with a sign posted on its door by the Nigerian tax authorities stating that the company was delinquent on its tax obligations.
Dr. Dozy somehow managed to trick Deloitte Israel into approving his companies accounts. It’s a bit confusing as to why the Israeli office of Deloitte audited a Nigerian company which was listed on a US exchange, to begin with, as Deloitte has offices in both the United States and Nigeria, one of whom would have normally done the audit.
Dr. Dozy’s real trick was getting a US exchange listing through the reverse merger. This was the company’s primary listing, not a secondary listing that foreign companies sometimes do to increase liquidity and investor reach. The US listing gave Tingo the appearance of respectability. They were listed in the most highly regulated country in the world (from a financial perspective), and this helped them to raise capital.
The problem is that the way a securities market gets a reputation of being highly regulated, is through having a serious regulator like the SEC, and investors like Hindenburg who pay a lot of attention to the details. Hindenburg points out that the corporate accounts which were submitted included basic errors like incorrect math and zeroes being left off of key metrics. I’m not sure how that slipped by Deloitte, and I imagine they will have some difficult questions to answer.
Tingo managed to get their listing this time last year, and the fraud was discovered within months. Dr Dozy discussed the scrutiny he found himself under just two months later on a podcast. [Clip]
Dr Dozy told “The Cable” a Nigerian News outlet last week that the SEC’s allegations against him are “baseless” and said that he “will contest them with unwavering resolve”.
He went on to say that “He is committed to co-operating with the legal process to ensure a thorough and fair examination of the facts, which he believes will ultimately lead to his exoneration.” So, that sounds good…
Tingo – the company - said in a statement that it “intends to vigorously defend itself in relation to the SEC complaint”.
The SEC complaint seeks permanent injunctive relief, disgorgement of ill-gotten gains and prejudgment interest, civil penalties, and the return of bonuses and profits obtained by Dr Dozy from sales of Tingo Group or Agri-Fintech stock. The complaint also seeks an order prohibiting Dr Dozy from acting as an officer or director of a public company or from participating in the offering of any penny stock going forward.
Oh, there is one small thing I left out. Dr. Dozy, as you might imagine, is a bit of a polymath, and he describes himself as the author of five books. The books are available on Amazon, and while I haven’t actually read them, I think my favorite would be Lucifers Gate – I base that on the Amazon description – which goes like this...
The universal complex on the casual plane is an architectural wonder, why would it not be? It was 5he hand work of beings that had a close view of the heavenly world. Its amazingly beauty, opulence and splendour. It has all the computers that control time in the lower worlds particularly the physical universe.
Time was running out since its adjustment by the Great Universal time keeper, the agent's of the kingdom of darkness of the lower worlds were running helter-skelter seeking what to do to know when the End-Time would be.
Well, I won’t read the whole thing out to you, but it appears to be Modernist Avant Garde Religious fiction, which is (of course) my favorite genre.
Thanks for tuning into this week’s podcast. This is the last one of 2023. I hope you have a great year in 2024, talk to you again soon, bye.