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Breaking News: Tingo Group Announces Completion Of Investigation Into Allegations Made Against the Company

Published

8 months ago

August 30, 2023

Editor

By Michael Effiong

Tingo Group, Inc. (NASDAQ: TIO) (“Tingo” or the “Company”), a profitable and fast growing fintech, agri-fintech and food company has announced to the international financial market that 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

Related Topics:Hinderberg NASDAQ Tingo Group

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No Such Deals Exist, Maersk Debunks $600m Investment Agreement with Nigeria

Published

21 hours ago

April 30, 2024

Eric

A report from Lloyd’s List has debunked the statement of the President Bola Tinubu-led Federal Government that Maersk has concluded and signed an agreement for a $600 million into the port sector.

The paper’s report reads:

A $600m investment into Nigeria’s port sector from Maersk, announced personally by the West African state’s president Bola Tinubu on Sunday, appears to be less solid than the government initially claimed.

Despite a presidential statement from Tinubu detailing how he had secured the purported investment during a World Economic Forum meeting in Riyadh over the weekend, Maersk officials have confirmed that no such agreement is in place and no deals have been signed.

The Nigerian government statement detailed how A.P Moller-Maersk chairman Robert Maersk Uggla had discussed the investment with president Tinubu on the sidelines of a meeting discussing energy development and growth. The statement even included a direct quote attributed to Uggla saying: “We believe in Nigeria, and we will invest $600 million in existing facilities and make the ports accommodating for bigger ships”.

But according to Maersk, that deal does not exist.

Company officials said while Uggla did meet the president, no such deal had been signed.

“Maersk has been present in Nigeria for 35 years and, as a global provider of logistics services, we remain committed to develop opportunities for growth to people, the port sector and businesses locally,” the company said in a statement to Lloyd’s List.

“Therefore, it is natural to have an ongoing dialogue with the administration. However, we are not able to comment on any investment talks.”

Maersk is due to report first-quarter results on Thursday, meaning that management are in a regulatory quiet period limiting what they can say publicly about the company’s activities.

Nigeria has promised to revamp its ports, including in the commercial capital Lagos, to ease congestion.

Tinubu’s statement explained that his government would support the modernisation and automation of its ports to improve trade, reduce corruption and boost efficiency. He claimed that the purported Maersk investment would “complement the administration’s ongoing $1bn investment in seaport reconstruction across the eastern and western seaports of Nigeria”.

“A bet on Nigeria is a winning bet. It is also a bet that rewards beyond what is obtainable elsewhere,” he said. “We need to encourage more opportunities for revenue expansion and minimise trans-shipments from larger ships to smaller ships.”

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I’ll Continue to Take Difficult Decisions Tough times Notwithstanding – Tinubu

Published

5 days ago

April 26, 2024

Eric

President Bola Tinubu, on Thursday, told the Dutch Prime Minister Mark Rutte at The Hague that his administration is committed to taking difficult decisions for the benefit of the Nigerian people, despite the short-term challenges.

Tinubu emphasized that Nigeria has weathered the worst of storms and that his administration’s actions are guided by a long-term vision for the country’s prosperity.

The president highlighted the vast trade opportunities between Nigeria and the Netherlands, spanning multiple sectors. He also underscored his government’s efforts to enhance the investment climate through ongoing reforms.

Notably, Tinubu emphasized Nigeria’s potential to drive the global clean energy transition with its high-grade lithium deposits, positioning the country as a key player in Europe’s energy future.

Tinubu stressed the importance of balanced and mutually beneficial partnerships, particularly in solid minerals, to create value-added opportunities.

He expressed confidence in the Nigerian people, citing their resilience and determination.

This confidence, he said, empowers him to make tough decisions on their behalf, knowing that these choices will provide Nigerians with the tools they need to succeed in the long term.

The president stated: “I am a determined leader of my people. I have and will continue to take the difficult decisions that will benefit our people, even if there is short-term pain.

“We have gone through the worst of the storms. I am unafraid of the consequences once I know that my actions are in the best long-term interests of all Nigerians.

“Taking a holistic view of the world order, there is a tremendous opportunity between us across trade spheres, but especially in solid minerals, where we have high-grade lithium deposits that we know can power the clean energy future of the world.“There is excellent value-additive opportunity in Nigeria. The world knows us for oil. They will soon know us for greater innovative exploits in other areas.”

The meeting with Prime Minister Rutte at The Catshuis, the official residence in The Hague, underscores the strengthening of diplomatic ties between Nigeria and the Netherlands.

Tinubu’s remarks reaffirm his administration’s commitment to bold leadership and strategic decision-making, even in the face of challenges, to secure a brighter future for Nigeria.

Featured

Rivers: Wike’s Men Reject Reployment, Resign from Fubara’s Govt

Published

6 days ago

April 25, 2024

Eric

Two Rivers State commissioners have resigned their appointments shortly after they were redeployed in a cabinet reshuffle by Governor Siminalayi Fubara. They are the Attorney General and commissioners for Justice, and Finance; Zacchaeus Adangor and Isaac Kamalu respectively.

The duo were affected by a minor cabinet reshuffle made by the governor on April 23.

Kamalu and Adangor are loyalists of Nyesom Wike, the immediate former governor of Rivers and incumbent minister of the federal capital territory (FCT).

Last year, the commissioners resigned from their positions following the political feud between Wike and Fubara.

They were later reinstated after Wike and Fubara signed a peace accord facilitated by President Bola Tinubu.

While Adangor was moved to the ministry of special duties (governor’s office), Kamalu was moved to the ministry of employment generation and economic empowerment.

Kamalu’s resignation came hours after Zacchaeus Adangor, tendered his resignation.

In a letter addressed to Tammy Danagogo, secretary to the state government (SSG), Kamalu said the governor’s “inability to maintain peace” in the state was the reason he quit the cabinet.

The former commissioner said he could not give his best in an atmosphere of rancour.

“Your Excellency would recall that I served under the Administration of His Excellency, Chief Nyesom Ezenwo Wike, CON, GSSRS, POS (now Honorable Minister of the Federal Capital Territory, Abuja) originally as Commissioner for Budget and Economic Planning (2015-2019) and subsequently as Commissioner for Finance with oversight responsibility for the Rivers State Ministry of Budget and Economic Planning (2019 – 2023),” the letter reads.

“The mandates of the respective Ministries were to the best of our abilities (as Ministries) duly carried out and at all times material relevant reforms were embarked upon for improved performance and effective and sustainable service delivery.

“Among several others, we successfully carried out the following; “Initiating and (supporting existing) policy frameworks for enhanced internal revenue generation.

“This with (necessary adjustments made on some of the programs) led to the increase in the internal revenue receipts. This steady rise has presently generated though not the figures erroneously claimed in the media.

“Aggressive improvement in Federation receipts by securing recovery by the state of oilfields that were also the subject of the successful claim against International Oll Companies (IOCs) on production sharing contracts; the recoveries arising from 13% derivation and the demand by the state for adherence to the fiscal provisions in the constitution in support of states by successfully removing from Federation receipts institutions of Government whether state or federal not so recognized by the constitution such as the Police Trust Fund and others thus widening the available receipts for States and the last but not the least our success on the subject of Value Added Tax.

“The reason behind these painstaking efforts was to make available a basket of receipts sufficient to enable the state to deliver good governance through the provision of goods and services.

“It was this idea that informed the continuity and consolidation mantra that was the theme of your election campaign and government thereafter.

“You will respectfully recall that when the climate of discord became unbearable I and other like-minded members of the Executive Council that were appointed by you resigned.

“You thereafter engaged His Excellency, Asiwaju Bola Ahmed Tinubu, GCFR President and Commander-in-Chief of the Armed Forces of the Federal Republic of Nigeria and as Father of the Nation to intervene in the matter.

“In deference to the directive of Mr. President, I and the others were recalled and we all accepted and joined the cabinet again. I expected Sir that with the opportunity provided by Mr.President, every effort will be made to sustain peace.

“Regrettably Your Excellency the peace in Government and governance that we all – citizens and residents of the state desire has remained out of reach despite our consistent efforts and demand for same.

“This has affected our ability to protect and defend the gains that we made these past years.

“In the course of official engagements, I have reiterated the need for this peace and the fact we all are willing and determined to work for this.

“It is very difficult to deliver good governance where there is acrimony and discord. It is not the point of service that is important but the climate. Our present circumstance makes service delivery extremely challenging. I still hold the belief that it is never too late for peace.

“In view of the above, I find it difficult to accept the redeployment. I do not accept it. I reject it and convey to you my immediate resignation as Commissioner and member of the Rivers State Executive Council with effect from the date of this letter.

“While praying that the Good Lord grants us Peace, I thank you for the opportunity and assure you the assurances of my esteemed regards.”