As it declared sales of $977 million in the first half of 2023, Tingo Group said it relied on an investigation by its outside counsel “and further investigative work of its own,” to declare itself innocent of allegations leveled by Hindenburg Research almost 3 months ago.

On Wednesday, Tingo Group released a press statement claiming it had been found innocent after an investigation by an unnamed independent counsel. Tingo Group said, “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 company’s press statement says a separate outside counsel carried out an investigation that followed up the report of the unnamed independent counsel. Without explaining what the independent counsel discovered or recommended, Tingo Group said it relied on the second investigation by its outside counsel “and further investigative work of its own” to declare itself innocent of all the Hindenburg allegations. 

The embattled company had previously named prestigious law firm White & Case as its independent counsel after a report by short seller, 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 several White & Case partners in New York, London, Hong Kong and the UAE, but we have yet to receive a response.

With Tingo, the more you look…

In Tingo’s Wednesday press release, Tingo explained some of the allegations made by Hindenburg research; the financial statement errors (Hindenburg had accused Tingo of filing financial statements that were unbalanced, missed some figures and missing inventory) that run into hundreds of millions were merely “typographical errors.” A partnership with Stanbic Bank that was exposed to not exist had merely failed due to fallout over a 2021 press release and was subsequently replaced by a partnership agreement with Visa. Tingo now says it is building a “super app” based on that partnership.

A mobile virtual network partnership with Airtel that was exposed by WeeTracker to not exist is now provided by an undisclosed third party and covers all four mobile network operators in Nigeria. In addition, Tingo earns commissions from airtime and internet data sales. The NWASSA platform which is now inaccessible after reports that it did not work is now a USSD platform that is pre-loaded on the Tingo Mobile phones that are then leased to the cooperatives and their farmers. Tingo Group did not disclose the USSD code to access the platform. The earlier USSD code available on the NWASSA website did not work. Here’s the full rebuttal from Tingo.

Tingo’s most recent SEC filings show a drop in the company’s cash balance from around $780 million in March 2023 to just over $53 million in June. This is despite reporting revenues of $1.828 billion in the year’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 cash balances as due to vendor payments and advances. These payments include

A $434.2 million payment to a mobile phone supplier to purchase 6 million phones (type not specified) for 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 outstanding balances. It did not disclose when these outstanding invoices were incurred.

Self-funding food stocks before receiving payments for same. This is essentially, Tingo buying the food it claims to export ahead of receiving customer payments.

And a $174 million tax payment to the Nigerian government for Tingo Mobile for 2022.

Last year, the company reported a little over $21 million in revenue and $3 million in gross profit in the same period. In the first two quarters of 2023, that $3 million in gross profits has jumped to more than $732 million. Tingo says the more than 8000% growth in revenue was the result of the acquisition of Tingo Mobile and Tingo Foods and the commencement of food exports by a new company Tingo DMCC in May. 

After several postponements, the embattled company held an earnings call for its second quarter results yesterday morning (Eastern Time) where it claimed profits (before tax) of $420 million in the first half of the year. Tingo’s President Chris Cleverly, also announced that the company would begin quarterly dividend payouts—if it was allowed access to forex by the Nigerian government.

On its part, Hindenburg Research released another report saying Tingo did not answer any of the questions it had asked the company in its initial report. The short-seller has accused Tingo Group of contradicting prior SEC filings in its latest press release where it absolved itself from blame. 

Hindenburg says at least one of the vendor payments which Tingo claimed was the cause of the drastic drop in cash balances, was to a company that was only registered in July in Niger Republic, Nigeria’s northern neighbour. Here’s the full rejoinder by Hindenburg.

After a brief spike following the release of Tingo Group’s press release announcing the completion of investigations and the earnings call held yesterday, the company’s shares resumed their downward trend, closing at $1.29 almost 8% down from the previous day’s close.