A Nigerian businessman, Dozy Mmobuosi, has reacted to the fine of $250 million imposed on him by a federal court in the United States of America.
The businessman, who had wanted to buy English football club Sheffield United, also had other penalties imposed on him.
This included being barred from serving as a director of a public company.
The US Securities and Exchange Commission had last year charged Mmobuosi and three of his companies, including two Nasdaq-listed enterprises, with fraud for inflating the “financial performance metrics of his companies and key operating subsidiaries to defraud investors worldwide”.
Judge Jesse M. Furman of the US District Court for the Southern District of New York has now entered a final judgment by default against Mmobuosi and his companies after the entrepreneur failed to make any representations in the civil complaint filed last December by the SEC.
The judge said Mmobuosi and his companies: Tingo Group, Agri-Fintech Holdings and Tingo International Holdings, had “failed to answer, plead, or otherwise defend” themselves in the case.
Mmobuosi and his three US-based entities have been ordered to pay more than $250 million in fines after the SEC alleged that his empire was a “fiction”.
Tingo, a fintech group, claimed it had more than nine million customers in Nigeria, most of whom were farmers, and that it had a food processing business.
The SEC said in last year’s complaint that the “purported assets, revenues, expenses, customers and suppliers” of Mmobuosi’s Tingo group were all “virtually entirely fabricated” and that the scale of the fraud at the venture was “staggering”.
Tingo Mobile reported cash and cash equivalents of $461.7 million for 2022 in its Nigerian bank accounts, but the SEC said its balance was less than $50.
Hindenburg, the US-based short seller, cast doubts on the viability of the business last year, calling it an “exceptionally obvious scam” in a report that sent Tingo’s stock prices plummeting more than 60 percent on the day of its release.
The charges filed last year came a month after the SEC halted the trading in the shares of Nasdaq-listed Tingo Group and Agri-Fintech Holdings over what the agency described as “questions and concerns regarding the adequacy and accuracy of publicly available information”.
The entrepreneur shot into the limelight last year when he launched an audacious bid to buy Sheffield United, a Yorkshire-based club that played in the English Premier League last year and is now in the second tier of English football.
Speaking in a statement late on Sunday, Mmobuosi, who is in Nigeria, said: “I founded Tingo over 23 years ago, with a mission to solve real life problems and challenges, and I am still committed to fulfilling that mission. I have taken time to reflect on all that has transpired in New York whilst, at the same time, being the subject of a now completed investigation by the Nigerian Police Force. I have watched as my reputation and the reputation of the businesses I built through hard work and perseverance have been grotesquely caricatured across the media.
“I voluntarily submitted myself to the rigours of a thorough Police investigation in Nigeria. I can now report that the investigation was completed, and their findings were sent to the SEC. To this end, I am now able to address you all directly.
“At the core of our business in Tingo is our mission to make those who feel unseen more visible and to give voice to those who have gone unnoticed for far too long. It is a mission predicated on equity and fairness. Whilst I do not attest to be a saint, I can unequivocally state that the SEC has gone to great lengths to tarnish the hard work and aspirations of so many people – from those at board level to junior staff working in the rural communities in Nigeria. The SEC have contrived a corporate Serengeti with the aim of creating a torrent of chaos within the business and sit back as we tear ourselves apart. Upon filing their Civil Claim, the SEC forthwith cut off the lifeblood of the business as they froze all our resources and effectively left the business in a comatose state. They levied spurious and egregious allegations at us knowing that they would not be forcefully opposed – not because of any supposed substance to their allegations but because they were (and indeed still are) acutely aware that the defendants would not be able to raise the necessary funds to mount a rigorous Defence.
“As you would observe from the court docket, the SEC has regularly updated the Court with regards to correspondence received from the defendants or on their behalf. There appears to be one flagrant omission however. There is no mention of the Police Report from the Nigerian Inspector General of Police’s Office, which is in their possession. For the sake of clarity, the Inspector General of Police for the Federal Republic of Nigeria is the Head of the Nigeria Police Force and their report could be easily verified. It is therefore unconscionable and indefensible that the SEC would choose to withhold this from the Court. Rather than working with the authorities in Nigeria to thoroughly investigate the underlying businesses (which are domiciled in Nigeria), they appear to view them as irritants.