The US financial watchdog is suing a Nigerian businessman who seemed to be on the verge of acquiring the Premier League football team Sheffield United. The lawsuit claims that the businessman committed fraud by fabricating documents and creating fake companies without any basis.
The SEC announced on Monday that it had pressed charges against Dozy Mmobuosi for allegedly deceiving investors by falsely inflating his companies’ financial success by hundreds of millions of dollars.
The regulator brought a case against Mmobuosi as an individual, as well as his company Tingo Group, which is publicly traded on the Nasdaq. The case also involves two affiliated companies, Tingo International Holdings and Agri-Fintech Holdings.
The regulatory body claims that Mmobuosi was the mastermind behind a “shocking” scam that has been ongoing for several years.
The Securities and Exchange Commission (SEC) stated in a legal document that the fraudulent activity primarily involved Tingo Mobile, a Nigerian company established by Mmobuosi. This company claimed to provide mobile phones and services to farmers in Nigeria.
The accusation was that Mmobuosi fabricated false bank statements and forged documents to make it seem like Tingo Mobile was a successful company worth over $1 billion, even though it actually had very few customers and operations and only $15 in its bank account.
Supposedly, he orchestrated the transaction of Tingo Mobile being sold by Agri-Fintech to the Nasdaq-listed Tingo Group through an all-stock merger. This resulted in the fabricated income being included in the newly formed company.
He replicated his tactic by selling Tingo Foods, which was deemed an “elaborate fabrication,” to Tingo Group for $204 million earlier this year.
The Securities and Exchange Commission stated that Mmobuosi and the entities under his control have deceitfully acquired hundreds of millions in funds or assets through these fraudulent schemes.
The Securities and Exchange Commission’s decision was made within half a year after short seller Hindenburg Research accused Tingo Group of engaging in fraudulent behavior. The report, which labeled the company as an “obvious scam,” caused a 48% decrease in the company’s stock price.
At the time, Tingo Group stated that the Hindenburg report included false and defamatory information. They also enlisted a legal team to carry out an unbiased inquiry.
The SEC’s lawsuit states that Tingo Group has been accused of perpetuating false information and has not stopped creating fraudulent records in their public reports. The suit also claims that Mmobuosi used company funds for personal gain, leading to an extravagant lifestyle.
The Securities and Exchange Commission alleges that he used tens of millions of pounds to buy luxury cars, fly on private jets, and attempt to purchase Sheffield United while the club was in the lower-tier Championship league.
Earlier this year, it appeared that Mmobuosi was on the verge of acquiring the South Yorkshire club in a deal valued at over £100m. The Blades made their return to the top division in August.
The owner of the club, Prince Abdullah Bin Mosaad Bin Abdulaziz al-Saud, was eager to sell and facilitated a transaction with American businessman Henry Mauriss that ultimately did not go through last year.
Mmobuosi agreed terms with Prince Abdullah and said he had paid a deposit but the English Football League asked him and the club to answer further questions to enable it to decide whether to sanction the takeover.
The league released a statement in February stating that they had received evidence of adequate funding from the proposed purchaser and club. However, they had additional concerns and have been awaiting a response for some time.
Negotiations between the prince and Mmobuosi fell apart, despite Mmobuosi’s previous interest in investing in Southampton FC and Crystal Palace.
The SEC has requested urgent action to freeze Mmobuosi’s assets and prevent the three companies from transferring funds, property, or issuing shares to Mmobuosi.
The party is also requesting a court order to stop the defendants from selling or getting rid of their ownership in Agri-Fintech or Tingo Group, and to forbid them and their representatives from destroying, changing, or hiding any records or documents.
The Guardian has reached out to Tingo Group for a statement.
According to a post on its website, the Tingo Group stated that it will “completely collaborate” with regulatory authorities.
Source: theguardian.com
