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Tingo Group Announces Completion of Investigation Into Allegations Made Against the Company in Short-Seller Report and Issues its Response

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1 year ago

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Tingo Group, Inc. (NASDAQ: TIO) (“Tingo” or the “Company”), a profitable and fast growing fintech, agri-fintech and food company, today announced it has completed the investigation of the allegations made by short seller Hindenburg Research (“Hindenburg”), that relate directly to the Company and its businesses.

At the direction of the Company’s independent directors, independent counsel investigated certain of the Hindenburg allegations and provided the independent directors with an interim report summarizing evidence it had reviewed, along with items requiring further investigation. The Company’s outside counsel then conducted its own investigation into the allegations, which included following up on the items identified by independent counsel. Based on the Company’s outside counsel’s investigation and further investigative work of its own, the Company has concluded it can now provide the following response to the allegations in the Hindenburg report:

Agri-Fintech Holdings, Inc. Resignation of Director: Christophe Charlier was a co-Chairman of OTC-listed company, Agri-Fintech Holdings, Inc., which sold Tingo Mobile Limited to the Company on November 30, 2022. Mr. Charlier has never been a member of the Company’s Board of Directors, nor has he been involved in the management of the Company. In his resignation letter, which was filed with the SEC, Mr. Charlier complained only of a lack of communication and teamwork at Agri-Fintech Holdings.
Tingo Foods Revenue and Operating Margin: The revenue reported by Tingo Foods in Q1 2023 and its operating margin of 24.8 % has been confirmed.
Tingo Foods Business Relationships: During the period from September 2022 to March 31, 2023, Tingo Foods purchased its raw crops from two organizations in Nigeria, including the All Farmers Association of Nigeria (“AFAN”), which delivered the crops to third-party food processors. Tingo Foods then sold the processed food to several large wholesalers in Nigeria.
Food Processing Facility: The construction of the Tingo Foods processing facility in Nigeria is well underway, with food and beverage processing operations expected to commence in Q2 2024. The images and renderings used for the Foods Processing Facility’s groundbreaking ceremony in February 2023 and in early presentational materials were stock images provided by an external marketing company, whereas specific renderings of the actual facility are currently being utilized. The Company has contracts in place with the construction company for the project and with Evtec Energy Plc and TAE Power Solutions Limited for the construction of a solar power plant to power the processing facility. Evtec Energy Plc is a special purpose vehicle for the project, whereas TAE Power Solutions Limited is a part of a multinational group that has been trading for more than 25 years.
Tingo Foods Sale of Inventory: The inventory held by Tingo Foods at the time it was purchased by the Company in February 2023 was sold to a customer on March 20, 2023, the proceeds for which were received on June 29, 2023.
Tingo Mobile Business Relationships with Farming Organizations: Tingo Mobile leases mobile phones to four co-operatives and farming organizations: the Kebbi (Dala) Multi-Purpose Cooperative Society (“Kebbi”), the Ailoje Royal Farms Multi-Purpose Cooperative (“Ailoje”), the All Farmers Association of Nigeria (“AFAN”), and the Ashanti Investment Trust (“Ashanti”). The two farming cooperatives referenced in the Hindenburg report were Kebbi and Ailoje, to which Tingo Mobile has leased 4.5 million and 4.844 million phones respectively. The relationships with all the co-operatives and farming organizations have been confirmed.
Mobile License: Tingo Mobile does not directly provide airtime and data services on the phones it leases to customers, or through its Nwassa platform. Such services are currently provided by a third-party vendor. Tingo Mobile therefore does not require a Mobile License from the Nigerian Communications Commission. This arrangement allows Tingo Mobile’s customers to choose the best network provider for their location from Airtel, MTN, 9 Mobile and Globacom. Tingo Mobile earns a commission on the airtime and data services purchased by its customers, which it receives from its vendor, and which were previously received from Airtel.
Tingo Mobile’s Phone Suppliers: Since 2020, Tingo Mobile has purchased mobile phones from two suppliers: UGC Technologies Limited, with which it has had a contractual relationship since December 2020, and Bullitt Mobile, with which it has had a distribution agreement since February 2022.

Hindenburg contacted a company called UGC Mobile Technologies in the U.S., not Tingo Mobile’s supplier, UGC Technologies Limited, which has offices in Africa and China. Tingo Mobile has purchased almost all its mobile phones from UGC Technologies Limited to date, with only a small purchase of 1,000 units of Caterpillar branded phones from Bullitt Mobile in 2022.
Tingo Mobile’s Taxes: On April 7, 2023, Tingo Mobile paid in full to the Nigeria Federal Inland Revenue Service (“FIRS”) its corporate income tax (“CIT”) and Tertiary Education Tax (“EDT”) for the fiscal year 2022.
Tingo Mobile Ghana: The Company’s recently established operations in Ghana are currently conducted exclusively through its trade agreement with the Ashanti Investment Trust. The Company leases mobile telephones to individuals introduced through the Ashanti Investment Trust and such customers also have access to Nwassa. The sim cards, airtime and data are sold to customers through a third-party vendor, as a result of which Tingo Mobile is not required to have a license with the National Communications Authority in Ghana. Tingo Mobile does not currently deal with or accept any new customers other than through its relationship with the Ashanti Investment Trust, it is however preparing to further expand the company’s business in Ghana and is currently recruiting a workforce and building a website to assist in facilitating this.
TingoPay: Tingo Mobile entered into a partnership with Visa on September 27, 2021, subsequent to which it has hosted several joint events with Visa, and it also launched a beta version of TingoPay with Visa on February 14, 2023. Prior to contracting with Visa, Tingo Mobile entered into a strategic partnership agreement with Stanbic Bank, dated November 17, 2020, and work was undertaken by the parties to develop an integrated e-wallet solution. After a disagreement over the Tingo Mobile press release in April 2021, the partnership with Stanbic Bank ceased and Tingo Mobile instead entered into the partnership and e-wallet integration with Visa.
Tingo Mobile’s NWASSA Platform: The Nwassa USSD platform is pre-loaded on the Tingo Mobile phones that are leased to the cooperatives and their farmers. Other individuals that have their own mobile phone can also register on the Nwassa USSD platform and conduct transactions on the platform. The Nwassa platform can be used by farmers to purchase items such as farming inputs, insurance, micro-loans, or additional airtime. The transactions made through Nwassa are processed by a third-party payment processing company owned by an American multi-national fintech company, which collects a commission payment on behalf of Tingo Mobile on each transaction and remits the commissions to its bank account. Tingo Mobile has confirmed its Q1 2023 reported revenue from the NWASSA platform.
Tingo DMCC: Tingo DMCC is the Company’s new agricultural export business. As of June 30, 2023, Tingo DMCC had conducted three export sales transactions totaling $348 million with customers located in neighboring countries within Africa. Tingo DMCC currently conducts its business through its direct contacts and sales leads. It is, however, in the process of developing a separate website for use in the future.
Financial Statement Errors: The “errors” identified by Hindenburg in Tingo Group’s financial statements and MD&A in its year-end 2022 Form 10-K and Q1 2023 Form 10-Q were typographical errors that were obvious to the reader from the remainder of the numbers and other information.
All the information required to be disclosed relating to Certain Relationships and Related Transactions (including the acquisition of Tingo Mobile on November 30, 2022), and Director Independence, was included in the Form 10-K.

While the Company’s cash-flow statement inadvertently labeled an increase in trade receivables as a decrease, the numbers themselves were correct. The discrepancies Hindenburg identified between the change in receivables reported on the balance sheet and change in receivables reported in the cash flow statement reflect Hindenburg’s misunderstanding of the numbers and the relevant U.S. GAAP accounting standards, including in relation to how the business combinations that closed during the relevant accounting periods impacted the numbers. In both cases, the “difference” resulted from non-cash adjustments related mainly to the Company’s acquisition of Tingo Mobile in Q4 2022 and its acquisition of Tingo Foods in Q1 2023, all of which were correct.
Independent Auditors: The engagement with Brightman Almagor Zohar & Co., a firm in the Deloitte Global Network, was after consideration of the relevant factors regarding the location of auditors. Such factors included that the Company does not have any operations in the U.S., and the consolidation process and preparation for the group’s financial statement and SEC filings is performed by the Company’s finance function in Israel.
Bank Balances: Bank statements were obtained directly from the banks used by Tingo Mobile and Tingo Foods, and interviews with the banks were conducted over video conference calls. The bank balances of each company were confirmed at several dates, including at the Quarter End dates of March 31, 2023, June 30, 2023, and as late as August 3, 2023, which reconciled and agreed to each company’s accounting records and financial statements.

Tingo Mobile earns interest only on funds held in a fixed deposit account. Due to its cash needs from time to time, Tingo Mobile is unable to encumber a large portion of its funds in a fixed-deposit account that would earn interest.
Having concluded the investigation into the allegations made by Hindenburg against the Company and its businesses, which was deemed to be the highest priority, the Company and its outside counsel will now proceed to investigate Hindenburg’s allegations against the founder of Tingo Mobile and Tingo Foods, Dozy Mmobuosi.

About Tingo Group

Tingo Group, Inc. (Nasdaq: TIO) is a global Fintech and Agri-Fintech group of companies with operations in Africa, Southeast Asia and the Middle East. Tingo Group’s wholly owned subsidiary, Tingo Mobile, is a leading Agri-Fintech company operating in Africa, with a comprehensive portfolio of innovative products, including a ‘device as a service’ smartphone and a value-added service platform. As part of its globalization strategy, Tingo Mobile has recently begun to expand internationally and entered into trade partnerships that are contracted to increase the number of subscribed farmers from 9.3 million in 2022 to more than 32 million, providing them with access to services including, among others, the Nwassa ‘seed-to-sale’ marketplace platform, insurance, micro-finance, and mobile phone and data top-up. Tingo Group’s other Tingo business verticals include: TingoPay, a SuperApp in partnership with Visa, that is currently in beta version, offering a wide range of B2C and B2B services including payment services, an e-wallet, foreign exchange and merchant services; Tingo Foods, a food processing business that processes raw foods into finished products such as rice, groundnut oil, nut products, wheat, millet and maize; and Tingo DMCC, a commodity trading platform and agricultural commodities export business based out of the Dubai Multi Commodities Center. In addition to its Tingo business verticals, Tingo Group also holds and operates an insurance brokerage platform business in China; and Magpie Securities, a regulated finance services Fintech business operating out of Hong Kong and Singapore. For more information visit tingogroup.com.

 

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Christmas, Cash Scarcity and Attacks against CBN’s Proactive Stance – Toni Kan

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23 hours ago

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December 20, 2024

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Let us look at a few figures……..

Nigeria’s population is put at a little over 200 million people while the UK population is about 68 million. This means that the Nigerian population is about three (3) times that of the UK.

As at June 2023, the UK banking system had about 49,421 Automatic Teller Machines and almost 2.3 million Point of Sales Terminals.

By contrast, the Nigerian banking system had a little over 22,600 ATMS according to TechCabal and is projected to reach 29,000 by 2029 according to Statista. Conversely, Nigeria boasted 1,665,664 POS terminals as at December 2022. Meanwhile, figures attributed to Inlaks, which is described as Nigeria’s biggest ATM operator, suggest that Nigeria needs at least 60,000 ATM machines to serve its population of over 200 million.

Where is all this going? Well to borrow a phrase from the comedian, Jeff Foxworthy; hold my beer, sir!

Those who know me well know what my favourite Igbo proverb is. It goes something like this in translation – “the disease that gives you warning, does not kill you!” It is a proverb that underlines the imperative of proactivity, what the Igbo people might call igba mbo.

So, I was really pleased when I read that the Central Bank of Nigeria (CBN) was taking a proactive step to ensure that there is no cash scarcity this Christmas.

Nigerians love cash and that love can become obsessive and reach fever pitch at festive periods. Have you been to Abeokuta during Ojude Oba? Or to Kano during the Durbar? Or Onitsha during Ofala? Those are regional festivities. So, you can imagine what happens at Christmas!

All efforts at driving a cashless policy and economy seem to collapse when festivities come around the corner and this year, the CBN was quick to take proactive action weeks before the festivities reach fever pitch. But the apex bank’s interventions seem to be having unintended consequences even though as at the time of writing this, the apex bank had put out three (3) different circulars and one press release around the issue.

First, is a not-so-surprising pushback from the banks and then a seeming lack of understanding by the general public no thanks to rampant mis-information.

The issue of cash scarcity around the Christmas period worsened under the sway of Godwin Emefiele at the CBN. The fall-out from the disastrous naira redesign he superintended over at the apex bank continues to haunt our banking vaults but Olayemi Cardoso and team are focused on making sure we turn that dark corner.

Let us begin with the first circular dated November 29, 2024: “Cash Availability Over the Counter in Deposit Money Banks (DMBs) and Automated Teller Machines (ATMs).” The circular had two sections: DMBs were directed to ensure efficient cash disbursement to customers Over the Counter (OTC) with the CBN insisting that it will enforce the directive and ensure compliance.

Secondly, members of the general public were encouraged to report instances where they are unable to get cash Over the Counter or through ATMs. The CBN ended with a list of 37 email addresses and phone numbers across the 36 states and FCT for reporting issues.

On paper, it looked like Nigerians and the cash worries were all sorted this Christmas but it didn’t take time for the expected pushback to occur. News reports began to circulate of long queues at banks and of ATMs struggling to dispense more than N10,000. “NAN reports that long queues have emerged at ATM stands around the city as residents struggle to have access to cash…Meanwhile POS operators are currently taking advantage of the situation to demand exorbitant charges on transactions.”

While Nigerians were still trying to make sense of the reason behind the long queues, another report had an official of the Association of Senior Staff of Banks, Insurance, and Financial Institutions (ASBIFI) pointing fingers. According to the report, “ASSBIFI President, Olusoji Oluwole, told the Punch that “Banks have only two sources of cash: the CBN and retailers. The CBN has not met banks’ demands, and retailers often sell cash for profit, making it harder for banks to access funds.”

As if in response to the charge, the apex bank responded “with their full chest” as we say on social media with a December 13, 2024 circular – Updated Penalty on Inappropriate Cash Disbursement Practices by Deposit Money Banks (DMBs) in which it condemned the “illicit flow of mint banknotes to currency hawkers and other unscrupulous economic agents that commodify naira bank notes thus impeding efficient and effective cash distribution to banks’ customers and general public.”

Giving bite to the circular the CBN said any bank found culpable of “facilitating, aiding or abetting, by direct actions or inactions, illicit flow of mint banknotes” would be fined N150m and then hit with the full weight of the relevant provisions of BOFIA 2020.

This time no pointing fingers were seen but the CBN was not done. Eager to completely squelch rumours around “the validity or lack thereof of the old ₦1000, ₦500, and ₦200 banknotes” the refusal of which was contributing to the long queues, the CBN issued a press release shutting it down: “The Central Bank of Nigeria (CBN) has observed the misinformation regarding the validity of the old ₦1000, ₦500, and ₦200 banknotes currently in circulation….the CBN wishes to reiterate that the subsisting Supreme Court ruling granted on November 29, 2023, permits the concurrent circulation of all versions of the ₦1000, ₦500, and ₦200 denominations of the Naira indefinitely.”

The third circular from the CBN which it said was in line with its “ongoing efforts to advance a cash-less economy” seems to have hit a raw nerve among Nigerians who, as we have already noted, love their cash even though it is now an offence to spray the naira.

News outlets also seemed to also get it wrong. The CBN circular of December 17, 2024 did not put a limit on how much cash you and I can withdraw from banks. The limits imposed in the circular titled – CIRCULAR ON CASH-OUT LIMITS FOR AGENT BANKING TRANSACTIONS – are “for agency banking operations” and as reported by TheCable is among interventions intended to address “identified challenges, combat fraud and establish uniform operational standards across the industry.”

Now, can I have my beer back as I attempt to outline how easily well-intentioned policies are rubbished by that euphemistically named malady known as the “Nigerian factor”.

The ASBIFI official was quick to point fingers even though simple logic can show that Over the Counter cash scarcity and at ATMs has little to do with the CBN or its cash distribution operations but with our Nigerian any-how-ness.

Let’s consider this. How is it that banks cannot fill up 22,600 ATMS, most of which are within or in close proximity to their branches but can afford to give cash to 1.6m PS operators? Doesn’t this seem to suggest that someone is out to make sure that the ATMs don’t have cash while the PoS operators continue to make a killing?

And why does it seem right that Nigerians should continue to pay between N250 and N400 per N10,000 withdrawals to PoS operators when ATM charges are far lower at N35 and only after you have made multiple withdrawals from other bank ATMs?

Oh, bankers have said ATMs are difficult to maintain on account of several factors and this takes us back to the figures we shared from the UK. Of the 49,421 ATMs in the UK, “78% were free to use” during the period under reference. So, why do we always talk about maintenance when it comes to Nigeria? Imagine if we paid N10 per ATM transaction, wouldn’t that be better than paying N250 to a PoS operator for every N10,000 withdrawn?

And for context, in 2014, data on various e-payment channels indicated that Automated Teller Machines (ATMs) remained the most patronised payment mode in Nigeria accounting for 89.7% of all electronic transactions with PoS transactions accounting for just 4.58 per cent. Today, the reverse is the case and the question to ask remains; what changed? The answer has something to do with financial inclusion but that is a topic for another day.

As you ponder that poser, ask yourself why is it always difficult to get mint bank notes over the counter in the banks meanwhile, step into any event center and you will see some hawker waving bright new notes in your face. Surely, they don’t get those notes from the CBN.

When the CBN referenced the Supreme Court ruling granted on November 29, 2023 to the effect that the old notes are still legal tender, their X Formerly Twitter page was filled with bile. But what many are failing to contend with is that the current leadership is only trying to make sure the mess they inherited doesn’t get worse.

As we prepare for Christmas and the New Year the advice is simple; go to your bank and ask for your money or withdraw from the ATMs and if you suspect any funny business, email or call the hotlines provided by the CBN.

Say no to any-how-ness this yuletide.

 

Toni Kan is a PR expret and financial analyst.

 

 

 

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Aviation Minister Leads Delta APC Leadership To National Chairman, Advocates Unity Ahead of 2027 Elections

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2 days ago

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December 19, 2024

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The Honourable Minister of Aviation and Aerospace Development, Olorogun Festus Keyamo SAN, today, led the leadership of the All Progressives Congress (APC) in Delta State, to the National Chairman of the APC, His Excellency Dr. Abdullahi Ganduje, at the APC National Headquarters in Abuja.

 

During the meeting, the Delta APC leaders briefed the National Chairman on the current state of the party in the state and the ongoing efforts to reconcile party members. They presented the report of the Reconciliation Committee, which has been approved by the Delta State APC State Working Committee (SWC) and earlier submitted to the National Chairman.

The delegation emphasized the importance of collaboration, stating that the era of a one-man leadership style in Delta APC is over. They reaffirmed their collective commitment to working as a united team to reposition the party and strengthen its prospects ahead of the 2027 general elections. This new direction was evident in the composition of the high-powered delegation that visited the National Chairman.

 

In his response, the National Chairman, Dr. Abdullahi Ganduje, commended the Delta APC leadership for their efforts to foster unity and ensure the party’s victory in future elections. He assured them of his commitment to work with Delta APC leaders, including those absent from the meeting, to build a united and formidable front. During the meeting, Dr. Ganduje also spoke with Delta State APC Chairman, Elder Omeni Sobotie, who was unavoidably absent due to health reasons, and wished him a swift recovery following his recent surgery.

 

The delegation to the meeting comprised prominent leaders of the Delta APC, including: Olorogun O’tega Emerhor, OON-Founding Leader of APC in Delta State,

Elder Godsday Orubebe- Former Minister,

Senator Ede Dafinone,

Senator Joel Thomas-Onowakpo,

Rev. Francis Waive- Member, House of Representatives and

Hon. Victor Ochei-former Speaker, Delta State House of Assembly.

The meeting was concluded with a renewed sense of purpose among the Delta APC leaders and a shared commitment to repositioning the party for electoral success in 2027.

 

 

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Just In: Alleged N110.4billion Money Laundering: Yahaya Bello Begs Court: Spare me Landed Property in Maitama for Bail.

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2 days ago

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December 19, 2024

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A former governor of Kogi State, Mr. Yahaya Bello has pleaded with Justice Maryann Anenih of the Federal High Court sitting in Abuja to spare him the possession of a landed property in the Maitama district of Abuja as one of the conditions for bail.

 

Details later…

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