Tingo Group issues response to further allegations by Hindenburg

Tingo Group issued a response to further allegations made by short seller Hindenburg Research on August 31, 2023, which read in part, “As clearly explained, independent counsel investigated certain of the Hindenburg allegations and provided an interim report summarizing evidence it had reviewed along with items requiring further investigation. Thereafter, as part of its own investigation into the Hindenburg allegations, outside counsel followed up on the items identified by independent counsel. By way of further clarification, in addition to appointing the U.S. Independent & Internal Investigations team of a leading international law firm, the company engaged a Top 10 U.S. Law Firm as outside counsel to undertake its own investigation, and also the Nigerian offices of a separate global and Top 10 U.S. Law Firm to undertake investigative work in Nigeria. The Company holds accounts with two banks in Africa, one of which is a multi-national bank with offices in the U.S., the U.K. and Europe. As part of the investigations, the legal counsel obtained bank statements and other records directly from the banks. In addition, interviews were conducted with both banks. 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. The Company’s cash utilization during the second quarter of 2023 is clearly explained within the Company’s Form 10-Q, press release and financial results conference call presentation. As stated, the cash utilization included: making an upfront payment of $434.2 million on the purchase of 6 million handsets for new AFAN customers; prepaying AFAN for produce for Tingo Foods and settling their brought forward payables, resulting in a total net outlay of $336.1 million; and self-funding stock purchases of $225.8 million for Tingo DMCCs export sales, the revenues for which are scheduled to be received during the third quarter. In addition, tax payments totaling $174.0 million were made for Tingo Mobile on its taxable earnings for fiscal year 2022. The above expenditures have resulted in an addition of $434 million to the Company’s fixed assets, a receivables balance at June 30, 2023 of more than $360 million, and a reduction in current liabilities in the second quarter of more than $270 million. The U.S. dollar denominated balance sheet has however been materially impacted by the devaluation of the Naira against the U.S. dollar, which occurred during June 2023 as a result of the lifting of certain foreign exchange restrictions by Nigeria’s new presidential administration…The 38 questions submitted to the Company by Hindenburg on August 9, 2023, were clearly derived from the allegations contained within their report. All the questions pertaining to the Company and its businesses have been addressed through the recently concluded investigations and the Company’s press release of August 30, 2023. Furthermore, as stated within our press release of August 30, 2023, 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.”