A businessman from Nigeria, who seemed to be nearing a purchase of the Premier League team Sheffield United, is facing a lawsuit from the US financial regulatory agency for committing fraud. He is accused of fabricating documents and creating fictitious companies.
On Monday, the SEC announced that they had pressed charges against Dozy Mmobuosi for allegedly falsely inflating his companies’ financial performance by hundreds of millions of dollars in order to deceive investors.
The governing body brought forth a lawsuit against Mmobuosi as an individual, as well as his company Tingo Group, which is publicly traded on the Nasdaq stock exchange. Two other affiliated companies, Tingo International Holdings and Agri-Fintech Holdings, were also included in the claim.
The regulator claims that Mmobuosi was the mastermind behind a massive fraud scheme that has been ongoing for several years.
The SEC stated in a legal document that the fraudulent activity primarily involved Tingo Mobile, a Nigerian company founded by Mmobuosi. The company claimed to provide mobile phones and services to farmers in Nigeria.
According to the report, Mmobuosi fabricated bank statements and falsified accompanying paperwork to deceive others into believing that Tingo Mobile was a successful company valued at over $1 billion. In reality, the company had very few customers or operations and only had $15 in its bank account.
Supposedly, he orchestrated the transaction of Tingo Mobile being purchased by Nasdaq-listed Tingo Group from Agri-Fintech through an all-share merger. This resulted in the false revenues being included in the new company.
Later, he replicated the same maneuver by selling Tingo Foods, which was deemed a “complex fabrication”, to Tingo Group for $204 million earlier this year.
According to a statement from the SEC, Mmobuosi and the entities under his control have deceptively acquired hundreds of millions of dollars or assets through these strategies.
The SEC’s decision was made within a short period of six months following Hindenburg Research’s accusation of fraudulent behavior by Tingo Group. The research company’s report, which labeled the company as an “obvious scam,” caused a significant 48% drop in Tingo Group’s stock value.
At the time, Tingo Group stated that the Hindenburg report included “false and defamatory information” and also enlisted the help of a legal team to conduct an unbiased inquiry.
According to the SEC’s lawsuit, Tingo Group has been accused of repeating false information and creating false data in their public reports. The suit also alleges that Mmobuosi misused company funds to support a luxurious lifestyle.
The Securities and Exchange Commission alleges that large sums of money were redirected to pay for extravagant vehicles, private air travel, and an unsuccessful attempt to buy Sheffield United while the team was in the lower division of the Championship league.
Earlier this year, there were reports that Mmobuosi was close to finalizing a takeover of the South Yorkshire club. The deal was estimated to be worth over £100m. The Blades were promoted to the top division in August.
The owner of the club, Prince Abdullah Bin Mosaad Bin Abdulaziz al-Saud, was interested in selling and arranged a deal with American Henry Mauriss that did not go through last year.
Mmobuosi and Prince Abdullah have come to an agreement and Mmobuosi has made a deposit. However, the English Football League has requested additional information from both parties in order to determine whether or not to approve the takeover.
In February, the league released a statement stating that they had received some proof of adequate funding but had also raised further questions with both the potential buyer and the club. The league has been waiting for a response to these inquiries for a significant amount of time.
Negotiations between the prince and Mmobuosi, who had previously expressed interest in investing in Southampton FC and Crystal Palace, ultimately fell through.
The SEC wants to urgently prevent Mmobuosi from accessing their assets and stop the three companies from giving Mmobuosi money, property, or shares.
The plaintiff is also requesting a court order to stop the defendants from selling or getting rid of their shares in Agri-Fintech or Tingo Group, and to forbid them and their representatives from destroying, changing, or hiding any records or documents.
Tingo Group has been contacted by The Guardian for a statement.
Tingo Group stated on their website that they will comply with regulators.
Source: theguardian.com
