Dozy Mmobuosi’s Own Shareholders Sued Him and His Auditors in a U.S. Court Over the Tingo Fraud

Secrets Reporters

In April 2024, a shareholder of Tingo Group walked into a federal court in New Jersey carrying a 97-page complaint. He was not suing for himself alone. He was suing on behalf of Tingo itself, against the company’s founder, Dozy Mmobuosi, six of its directors, and the global audit firms that signed off on its books: Deloitte, Grant Thornton and Ernst & Young.

No newspaper in Nigeria or anywhere else has reported the case. SecretsReporters checks of the court records show it is one of three shareholder lawsuits filed against Mmobuosi and his circle in the United States District Court for the District of New Jersey, later consolidated by the court under the title In re Tingo Group, Inc. Derivative Litigation.

A derivative suit is a lawsuit shareholders file on a company’s behalf when they believe the company’s own leadership will not act. The plaintiffs say that is exactly what happened at Tingo.

The three cases

The first was filed by a shareholder named Al Rago on 28 September 2023, case 2:23-cv-20749. The second, the 97-page complaint, was filed by Michael Ford on 12 April 2024, case 2:24-cv-04894. The third was filed by Jia Cheng on 30 May 2024, case 2:24-cv-06567. In October 2024 the court grouped all three together under the Rago case as lead.

The defendants named across the complaints read like the full cast of the Tingo saga: Mmobuosi; directors Darren Mercer, Hao “Kevin” Chen, Robert Benton, John J. Brown, Kenneth Denos, John McMillan Scott and Sir David Trippier; and Agri-Fintech Holdings. The complaints place the auditors in a defendant group of their own: Deloitte Touche Tohmatsu, Deloitte & Touche, Brightman Almagor Zohar & Co., Gries and Associates and Grant Thornton Nigeria, with Grant Thornton International and Ernst & Young Americas sued as advisers.

What the shareholders allege

The Ford complaint says Tingo Mobile, the Nigerian phone business Mmobuosi presented as the company’s crown jewel, was “a Potemkin village,” a fake front with completely fictitious financial statements, invented customer lists and phony bank statements. The real bank statements, subpoenaed by America’s Securities and Exchange Commission, showed the business was dormant and broke, the complaint says.

The complaint traces how Mmobuosi sold Tingo Mobile twice at billion-dollar valuations built on those statements: first in August 2021 from his own Delaware company to Agri-Fintech, which he controlled, and again in December 2022 from Agri-Fintech to the Nasdaq-listed Tingo. Each sale handed him hundreds of millions of shares and control of a second publicly traded American company, the filing says.

Then, the complaint says, he did it again. In September 2022 he founded Tingo Foods, a purported Nigerian food processor, and in February 2023 sold it to Tingo for over $200 million, paid with a $204 million secured promissory note. The food business, the plaintiffs say, was conjured “from thin air,” with nonexistent customers and forged financial and bank statements, compounding the fraud in Tingo’s own reported results.

The auditors in the dock

What makes these suits different from the cases already in the news is who else is being sued. The shareholders accuse the audit firms of issuing materially false and misleading audit reports that blessed the fabricated numbers, and they have asked the court to hold Deloitte liable for aiding and abetting the directors’ breach of fiduciary duty and all the audit and advisory firms liable for professional malpractice.

The legal claims also include violations of Section 14(a) of America’s Securities Exchange Act, the law against misleading shareholders in proxy statements used to win their votes, alongside breach of fiduciary duty, unjust enrichment, gross mismanagement and waste of corporate assets.

The SEC has already collected

The derivative suits landed while America’s market regulator was finishing its own case. In SEC v. Mmobuosi in New York, the commission obtained a final judgment ordering Mmobuosi to pay $61,574,143.28 and to surrender and cancel the Tingo Foods promissory note, according to the SEC’s litigation release. Bloomberg Law reported the total judgment against Mmobuosi and his companies at over $250 million, granted after the defendants failed to answer or defend the action. United States prosecutors have separately filed criminal charges against him, conspiracy, securities fraud and falsifying records, in the Southern District of New York.

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