Citi Group Addresses Fraud Allegations Against Jumia by Citron Research

Last week, Citron Research, an online investment bulletin based in the United States, accused Jumia of committing fraud, claiming their shares are of no value and they had “never seen such obvious fraud.”

Some of Citron Research’s allegations against Jumia were,

  • Jumia “fudged its numbers” ahead of filing documents for its listing in the US.
  • Jumia’s largest shareholders MTN and Rocket Internet wanted to exit the company after it reported in 2018 that it had a year’s cash left.
  • Jumia’s revenue declined from $145 million to $131 million while adjusted EBITDA loss went from $161 million to $150 million.
  • Jumia had in 2018 presented an investment memorandum that had information that was grimmer than what is presented for its IPO in 2019. Thus alleging that some critical information that could have priced the stock lower was removed.
  • Some of the material discrepancies it claimed Jumia reported include a rise in active consumer numbers from 2.1 million in October 2018 to 2.7 million by April 2-19. Suggesting that this could not have been true.
  • Active merchants moved from 43k to 53k between the same period as well.
  • The report also accused Jumia of corporate fraud and related party infractions.

Click here to see the full report of their claims
Citigroup Global Markets Inc., an investment bank for Jumia Technologies, has however responded to fraud allegations against the e-commerce giant by Citron Research.

In its analysis of the claim, Citi Group stated that Citron’s claims had been manipulated and recommended Jumia to further disclose its performance.

The investment bank said it had become necessary to address the issues in view of the 50 per cent fall in the share price of Jumia at the New York Stock exchange and investors’ concerns over the validity of the allegations.

ALSO READ: Nigeria Loses $6 Billion Due to “Corrupt” Oil Agreement Fraud

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