A Nigerian businessman who appeared to be closing in on a takeover of Premier League Sheffield United FC is being sued by the US financial watchdog for a fraud, in which he is alleged to have faked documents and made up companies out of “thin air”.
The US Securities and Exchange Commission (SEC) said on Monday it had filed charges against Dozy Mmobuosi, claiming he inflated his companies’ financial performance by hundreds of millions of dollars to defraud investors.
The regulator filed its claim against Mmobuosi personally, and his company Tingo Group, which is listed on the Nasdaq stock exchange, and two related companies, Tingo International Holdings and Agri-Fintech Holdings.
The regulator alleges Mmobuosi orchestrated a “staggering” fraud the roots of which date back years.
In a court filing, the SEC said the fraud related mostly to Tingo Mobile, a private Nigerian company Mmobuosi founded that purportedly sourced and supplied mobile handsets and related services to farmers in Nigeria.
It claimed Mmobuosi created fake bank statements and forged supporting documents to give the impression that Tingo Mobile was a “thriving” business worth more than $1bn, when in fact it had “no meaningful customers or operations and about $15 in its bank account”.
He allegedly engineered the sale of Tingo Mobile from Agri-Fintech to Nasdaq-listed Tingo Group in an all-share merger, meaning the fake revenues were incorporated into the new company.
He then repeated the trick with the sale of Tingo Foods, described as an “elaborate fiction”, to Tingo Group for $204m earlier this year.
“Mmobuosi and the entities he controls have fraudulently obtained hundreds of millions in money or property through these schemes,” the SEC said in a statement.
The SEC’s action comes less than six months after the short seller Hindenburg Research claimed fraudulent activity by Tingo Group, alleging an “obvious scam” in a report that caused the company’s share price to fall by 48%.
Tingo Group said at the time that the Hindenburg report contained “misleading and libellous content” and also hired a law firm to conduct an independent investigation.
Tingo Group then allegedly doubled down on its alleged falsehoods and has continued to fabricate its results in public filings, according to the SEC’s suit, which claims Mmobuosi also “looted” money from the company to fund a lavish lifestyle.
The SEC claims tens of millions of pounds were siphoned off to fund his purchase of luxury cars, travel on private jets and for the abortive purchase of Sheffield United, when the club was in the Championship.
Mmobuosi seemed to be close to securing a takeover of the South Yorkshire club earlier this year, in a deal reportedly due to be worth more than £100m. The Blades returned to the top flight in August.
The club’s owner, Prince Abdullah Bin Mosaad Bin Abdulaziz al-Saud, had been keen to sell and brokered a deal with the American Henry Mauriss that fell 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.
In a statement issued in February the league said it had received “some evidence of source and sufficiency of funding” but that it had “raised a number of additional queries with the proposed purchaser and the club” and had been “awaiting a response on those queries for some time”.
Talks subsequently broke down between the prince and Mmobuosi, who had previously shown interest in investing in Southampton FC and Crystal Palace.
The SEC is seeking emergency relief freezing Mmobuosi’s assets and prohibiting the three companies from transferring money or property or issuing shares to Mmobuosi.
It is also seeking an order preventing the defendants from selling or disposing of their respective holdings in Agri-Fintech or Tingo Group and prohibiting them and their agents from destroying, altering, or concealing records and documents.
The Guardian has approached Tingo Group for comment.
In a statement on its website, Tingo Group said it would “fully cooperate” with regulators.
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