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Jumia Technologies‘s investment bank, Citigroup Global Markets Inc, has reacted to fraud allegations made against the African e-commerce giant by Citron Research.

The genesis of fraud allegation: One month after Jumia‘s unusual initial public offering on the New York Stock Exchange which was met with positive reactions from investors, research company, Citron Research, accused the online shopping firm of hiding vital information from investors in the United States.

Weighty allegations against Jumia: Jumia was accused of fudging its numbers to lure investors in the US during its listing on NYSE.

Some of the material discrepancies which Citron Research 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. According to the allegation, this could not have been true.

  • It also claimed that active merchants moved from 43k to 53k between the same period as well.
  • It further claimed that “the most disturbing disclosure that Jumia removed from its F-1 filing was that 41% of orders were returned, not delivered, or cancelled. This was previously disclosed in the Company’s October 2018 confidential investor presentation.” 
  • Thus implying that most of its orders were cancelled in 2018.
  • The report also accused Jumia of corporate fraud and related party infractions.

The allegations affected Jumia’s shares: Citron Research‘s allegations against Jumia negatively impacted the e-commerce firm’s shares, dropping by over 18% as at closing of trading at the NYSE on Friday.


Meanwhile, Jumia’s revenue had earlier declined from $145 million to $131 million, while adjusted EBITDA loss went from $161 million to $150 million.

Citigroup reaction to allegations: The bank accused Citron Research of manipulation, advising Jumia to disclose its performance due to the negative impact the fraud allegations have had on Jumia‘s shares price, having declined by 50% on NYSE.

Jumia isn’t new to fraud claims: Jumia seems to always be always involved with fraud allegation. Aside from the recent Citron claims, Jumia‘s subsidiary, Jumia Foods and its Managing Director, Guy Futi, were accused of fraudulent conversion and diversion of N214.695 million by one of the company’s vendors, Castle Logistics Services Limited in February 2019.

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The accusation led to the arrest of Futi by the Nigerian Police. Jumia, however, denied the arrest, claiming Futi was merely honouring police invitation. The company also stated that the fraud allegation is untrue, as the e-commerce company has an outstanding case against the vendor, who Jumia said is indebted to it and refused to pay.

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Other Nigerian Startups will be affected: The Citron‘s allegation against Jumia could have a spiral effect on other companies in Nigeria. The accusation of misleading information draws negativity to Nigerian startups that are trying to change the narrative about Nigeria and Africa.

African countries are usually trailed by negative news reported by the global media indyustry, and most are usually about corruption and violence. With Jumia portraying itself as the face of Africa in the e-commerce market, if the allegations are true, foreign investors will be cautious of disbursing capital into other companies such as Konga (although though Konga isn’t raising funds), and other startups in other sectors.


For your info: No e-commerce company in Nigeria is currently profitable. Both Jumia and Konga, the two leading online stores in Nigeria, are still operating without profit, although they both believe it’s achievable, with Konga claiming it will be the first.

However, with MTN and Rocket Internet divesting their shares in Jumia, investors may no longer believe in such optimism.


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