All you need to know about Tingo Group, latest target of short seller Hindenburg Research

The US-based short seller Hindenburg Research has created short positions in Nasdaq-listed Tingo Group and alleged that the company is "an exceptionally obvious scam with completely fabricated financials." Following Hindenburg's report Tingo Group shares collapsed a whopping 61 per cent to hit an intraday low of $1 in trade on Tuesday.

Tingo Group is the latest target of the short seller after it shorted Adani Group securities in January, Block Inc.'s shares in March and Carl Icahn's flagship Icahn Enterprises in May.

Hindenburg Research has criticised Tingo Group's founder and CEO “Dozy” Mmobuosi and raised red flags about Dozy’s background. 

"We’ve identified major red flags with Dozy’s background. For starters, he appears to have fabricated his biographical claim to have developed the first mobile payment app in Nigeria. We contacted the app’s actual creator, who called Dozy’s claims “a pure lie”. Dozy claimed to have received a PhD in rural advancement from a Malaysian university in 2007. We contacted the school to verify the degree. They wrote back saying no one by his name was found in their verification system," Hindenburg Research said.

The short seller alleged that Dozy claimed to have launched “Tingo Airline” in 2019 which was later found to be a sham.

“In 2019, Dozy claimed to have launched “Tingo Airlines” and posted social media messages encouraging customers to “fly with Tingo Airlines today”. Media outlets later uncovered that Tingo had photoshopped its logo onto pictures of airplanes. Dozy later admitted to never owning any actual aircraft,” Hindenburg said.

Tingo claimed its mobile handset leasing, call and data segments generated $128 million in revenue last quarter (15 per cent of total), claiming these services are provided through an agreement with Airtel in Nigeria. The type of license they claim did not exist until June, 2023.

Meanwhile, Airtel Africa has denied any relationship with Tingo saying, “Airtel Nigeria does not have any MVNO arrangement with any company called Tingo Mobile.”

Tingo has refuted all the allegations of the report, saying it was full of "misleading and libellous content".

"The Company also confirms that its accounting records are accurate and correct and that its financial results are accurately reported," Tingo said.

Tingo group is a holding company that claims to operate primarily in Nigeria in multiple business segments, including food processing and sales of mobile handset sales & leasing and an online food marketplace called “Nwassa”. 

The company first went public in August 2021 on the OTC market through a reverse merger with a Thai company that originally intended to acquire a third-tier crypto exchange.

In December 2022, the company entered the Nasdaq by closing another reverse merger with a listed Chinese fintech company. The company was renamed Tingo Group Inc and the ticker changed from MICT to TIO on February 27, 2023.

Here are the top allegations levelled by Hindenburg Research against Tingo Group:

• In 2017, Dozy was arrested and faced an 8-count indictment over issuance of bad checks, according to the Nigerian Economic and Financial Crimes Commission. He later settled the case in arbitration.
• In 2019, Dozy claimed to have launched “Tingo Airlines” and posted social media messages encouraging customers to “fly with Tingo Airlines today”. Media outlets later uncovered that Tingo had photoshopped its logo onto pictures of airplanes. Dozy later admitted to never owning any actual aircraft.
• In April 2023, Tingo’s Co-Chairman wrote a public letter to Dozy, filed with the SEC, saying he could not approve the company’s annual report and felt it “necessary to recuse myself by resigning” due to “many critical questions, comments and recommendations” that went “unanswered and unheeded”.
• Dozy attempted to buy Sheffield United, an English football team recently promoted to the Premier league. The deal stalled over questions about whether Dozy’s financial resources were genuine.
• Despite claiming to have millions of farmers using its mobile devices, Tingo’s corporate presentation and webpage use stock photos of farmers with phones