Agri-fintech Tingo Group has completed its investigation into various fraud allegations made by short seller Hindenburg Research.
In an August 30 announcement, Tingo revealed that an independent investigation by law firm White & Case, commissioned by the company’s board, has found that Hindenburg’s allegations that its cash balance had been fabricated were false.
The report confirmed the company’s first-quarter 2023 revenue and operating margin of 24.8% and said that the “errors” identified by Hindenburg in Tingo’s financial statements were “typographical errors that were obvious to the reader from the remainder of the numbers and other information.”
“While the company’s cash-flow statement inadvertently labeled an increase in trade receivables as a decrease, the numbers themselves were correct,” the investigative report reads. “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.”
Hindenburg’s May 6 short report also claimed that Tingo had made no progress on the construction of a $1.6-billion food processing facility in Nigeria, despite claims to the contrary made in regulatory filings. The short seller added that a $150-million deal with a U.K. firm to build solar panels on the site was also likely fake.
In contrast, Tingo’s report argued that construction was “well underway,” and that the images and renderings used in the regulatory filing were stock images. Tingo said it had contracts in place with TAE Power Solutions, and special purpose vehicle Evtec Energy, for the construction of a solar power plant to power the processing facility.
Having concluded the investigation into the allegations, Tingo said it will now turn its attention to Hindenburg’s allegations that Tingo Mobile and Tingo Foods founder Dozy Mmobuosi had faced an eight-count indictment over the issuance of bad checks in 2017 and had faked several biographical claims, including that he had earned a PhD in rural advancement.