Tingo Group waves aside Hindenburg allegations as it announces ~$1 billion in H12023 revenue

As it declared gross sales of $977 million in the primary half of 2023, Tingo Group stated it relied on an investigation by its exterior counsel “and further investigative work of its own,” to declare itself harmless of allegations leveled by Hindenburg Research virtually 3 months in the past.

On Wednesday, Tingo Group launched a press assertion claiming it had been discovered harmless after an investigation by an unnamed impartial counsel. Tingo Group stated, “At the direction of the Company’s independent directors, independent counsel investigated certain Hindenburg allegations and provided the independent directors with an interim report summarizing evidence it had reviewed, along with items requiring further investigation.” 

The firm’s press assertion says a separate exterior counsel carried out an investigation that adopted up the report of the unnamed impartial counsel. Without explaining what the impartial counsel found or really helpful, Tingo Group stated it relied on the second investigation by its exterior counsel “and further investigative work of its own” to declare itself harmless of all of the Hindenburg allegations. 

The embattled firm had beforehand named prestigious legislation agency White & Case as its impartial counsel after a report by brief vendor, Hindenburg Research accused Tingo’s operations and SEC filings as an elaborate con. White & Case reportedly ended its relationship with Tingo Group in July. TechCabal reached out to a number of White & Case companions in New York, London, Hong Kong and the UAE, however we have now but to obtain a response.

With Tingo, the extra you look…

In Tingo’s Wednesday press launch, Tingo defined a few of the allegations made by Hindenburg analysis; the monetary assertion errors (Hindenburg had accused Tingo of submitting monetary statements that have been unbalanced, missed some figures and lacking stock) that run into tons of of tens of millions have been merely “typographical errors.” A partnership with Stanbic Bank that was uncovered to not exist had merely failed as a consequence of fallout over a 2021 press launch and was subsequently changed by a partnership settlement with Visa. Tingo now says it is constructing a “super app” primarily based on that partnership.

A cell digital community partnership with Airtel that was uncovered by WeeTracker to not exist is now offered by an undisclosed third occasion and covers all 4 cell community operators in Nigeria. In addition, Tingo earns commissions from airtime and web knowledge gross sales. The NWASSA platform

which is now inaccessible after reviews that it didn’t work is now a USSD platform that’s pre-loaded on the Tingo Mobile telephones which might be then leased to the cooperatives and their farmers. Tingo Group didn’t disclose the USSD code to entry the platform. The earlier USSD code out there on the NWASSA web site didn’t work. Here’s the total rebuttal from Tingo.

Tingo’s most up-to-date SEC filings present a drop in the corporate’s money steadiness from round $780 million in March 2023 to simply over $53 million in June. This is regardless of reporting revenues of $1.828 billion in the yr’s first six months. According to Tingo SEC filings, $977 of that $1.8 billion was generated between April and June of 2023. Tingo explains the drop in money balances as as a consequence of vendor funds and advances. These funds embrace

• A $434.2 million fee to a cell phone provider to buy 6 million telephones (sort not specified) for brand new members of All Farmers Association of Nigeria (AFAN).
• Advances to AFAN for agricultural produce to be exported by Tingo Foods and a settlement of excellent balances. It didn’t disclose when these excellent invoices have been incurred.
• Self-funding meals shares earlier than receiving funds for identical. This is basically, Tingo shopping for the meals it claims to export forward of receiving buyer funds.
• And a $174 million tax fee to the Nigerian authorities for Tingo Mobile for 2022.

Last yr, the corporate reported a bit over $21 million in revenue and $3 million in gross revenue in the identical interval. In the primary two quarters of 2023, that $3 million in gross income has jumped to greater than $732 million. Tingo says the greater than 8000% progress in revenue was the results of the acquisition of Tingo Mobile and Tingo Foods and the graduation of meals exports by a brand new firm Tingo DMCC in May. 

After a number of postponements, the embattled firm held an earnings name for its second quarter outcomes yesterday morning (Eastern Time) the place it claimed income (earlier than tax) of $420 million in the primary half of the yr. Tingo’s President Chris Cleverly, additionally introduced that the corporate would start quarterly dividend payouts—if it was allowed entry to foreign exchange by the Nigerian authorities.

On its half, Hindenburg Research launched one other report saying Tingo didn’t reply any of the questions it had requested the corporate in its preliminary report. The short-seller has accused Tingo Group of contradicting prior SEC filings in its newest press launch the place it absolved itself from blame. 

Hindenburg says at the least one of many vendor funds which Tingo claimed was the reason for the drastic drop in money balances, was to an organization that was solely registered in July in Niger Republic, Nigeria’s northern neighbour. Here’s the total rejoinder by Hindenburg.

After a short spike following the discharge of Tingo Group’s press launch asserting the completion of investigations and the earnings name held yesterday, the corporate’s shares resumed their downward development, closing at $1.29 virtually 8% down from yesterday’s shut.