Connect with us
SSN
Advertisement
IZIKJON
Advertisement
forex
Advertisement
Stanbic IBTC
Advertisement
Binance
Advertisement
Esetech
Advertisement
Patricia
Advertisement
Fidelity ads
Advertisement
app

Business News

Citigroup reacts to Citron’s fraud allegations against Jumia, as shares price drops 50%

The investment bank for @Jumia_Group, @Citi Group Global Markets In, has reacted to fraud allegations made against the African e-commerce giant by @CitronResearch.

Published

on

Cameroon shutdown: Techpreneur picks holes in Jumia’s operations, Jumia Technologies, Rocket Internet

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.

Deal book 300 x 250

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.

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.

bitcoin train

Binance

Olalekan is a certified media practitioner from the Nigerian Institute of Journalism (NIJ). In the era of media convergence, Olalekan is a valuable asset, with ability to curate and broadcast news. His zeal to write was developed out of passion to shape people’s thought and opinion; serving as a guideline for their daily lives. Contact for tips: [email protected]

Click to comment

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Manufacturing

CBN tasks multinationals on domestic production as P&G signs $35m deal to produce Oral-B locally

The CBN Governor has called on multinationals operating in the country to work towards the production of their goods in Nigeria.

Published

on

The Central Bank of Nigeria, as part of its agenda to strengthen the manufacturing sector, has tasked multinational manufacturing companies in the country to consider setting up their manufacturing lines in Nigeria.

Godwin Emefiele, the CBN Governor made this statement during the contract signing ceremony between Procter & Gamble (P&G) and Colori Cosmetics Nigeria in Lagos.

The contract which is a move towards stimulating localization of production was birth from CBN’s policy-driven efforts to encourage improved production of goods that can be produced locally.

The Governor of Nigeria’s apex bank who was the host at the contract signing ceremony encouraged other multinational firms to consider the opportunities that Nigeria offers and begin to set up their manufacturing lines in Nigeria, noting that this move will help in creating jobs and wealth for the growing population.

Emefiele who also spoke on the economic stabilization policies implemented by the CBN to set Nigeria on the path of recovery explained that the manufacturing sector will continue to be a key focus of the efforts by the monetary and fiscal authorities towards driving the recovery of the Nigerian economy.

Why this matters

  • The investment deal which is worth $35 million is set to present the well-diversified consumer goods giant with the opportunity to commence the domestic production of Oral-B toothpaste in Nigeria.
  • The contract between P&G and Colori Cosmetics Nigeria will facilitate the local production of Oral-B products by P&G in Nigeria, as part of the commitment by the CBN to strengthen the manufacturing sector.
  • This move is expected to make Nigeria a competitive producer of the product, and also cut the importation of toothpaste from the US, where P&G is based.

Continue Reading

Sports

Cristiano Ronaldo: The billionaire businessman you probably don’t know about

The mercurial Portuguese sets the bar for other professional footballers when it comes to making money off the pitch.

Published

on

Cristiano Ronaldo tests positive for COVID-19

When you hear the name Cristiano Ronaldo, what probably comes to your mind is the image of the exceptionally talented, handsome, and successful football player that has taken the term “world-class” to another pedestal.

Records upon records have been broken by this 36-year old, and the best part is that it seems he is not stopping anytime soon. However, there is more to football when it comes to the Portuguese. He is an avid businessman.

Yes, you heard that right. Ronaldo recently became the first footballer, and only the third sportsperson, after Tiger Woods and Floyd Mayweather Jnr., to hit the $1bn mark in terms of earnings. He cost over a $100m while swapping Real Madrid for Juventus back in 2018, while he will also earn close to $140m, if he stays for the entirety of his 4-year contract.  While his on-pitch successes have brought him a lot of fortune, he has made more off it.

He is 36 now, which means he is closer to the end of his career, and while many players opt to go towards the football line after their playing days are over, Ronaldo has consistently stated that he doesn’t see himself in football after he retires.

Since he clocked 30 years old back in 2015, he has been actively pursuing business opportunities that would continue to fetch him money even after he hangs up his boots.

This article highlights 4 ways in which the mercurial Portuguese has set the bar for other professional footballers when it comes to making money off the pitch.

The name of the game is endorsement

Ronaldo has been able to milk his public persona to good and effective use. He is adored by millions of fans all over the world for his consistency, excellence and longevity. These attributes make him the perfect fit for tons of businesses who jostle for his signature to be their brand ambassadors. His deal with Nike will see him earn at least $19m a year until he is 73 years old. He also has sponsorship deal with Herbalife, KFC, Castrol, and Samsung.

He has been able to leverage the sheer numbers of his followers across different social media platforms. He has 91m followers on Twitter, approximately 125m follow him on Facebook, while a whopping 266m people follow him on Instagram. A combined fan base of 482m means that he commands a high price for endorsements, as brands would pay over the odds to see him promote their goods and services.

Partnerships all the way

For all his success on the pitch, Ronaldo has astute business sense. In 2019, while speaking about his partnership with Insparya, a haircare group, Ronaldo said, “Alopecia is a very big problem in Europe and around the world and we want to help people improve their self-esteem and not be ashamed to come to us. This project is going to be a success, as we want to help the Spaniards and the Spanish economy.”

Ronaldo also has interests in the hospitality industry through his partnership with the Pestana Hotel Group. There are currently five hotels: one each in Lisbon and Madeira, his hometown while finishing touches are being put in place for three locations in New York, Madrid and Marrakech. CR7 Pestana Paris will also open in 2021, with the Portuguese looking at more premium locations to further establish his brand.

Varied Investment Portfolio

He also has a stake in Grupo Mabel Capital alongside Spanish celebrities such as Pau Gasol, Rafa Nadal and Enrique Iglesias. Grupo own the chain of restaurants called Tatel, which has presence in Madrid, Miami and famous resort and holiday town, Ibiza. He has also invested in Zela Restaurants, which has outlets in both London and Ibiza.

Ronaldo’s investments surely won’t seem right if he doesn’t own or run a fitness line. His determination to excel in his career has seen him reach unbelievable levels of fitness. His match recovery regimen and nutrition is well-known, which has seen him score an astonishing 300 goals since turning 30. In 2016, he agreed a partnership with Crunch Fitness, with two CR7 Crunch Gyms still running in Madrid.

He also has a creative agency named 7EGEND, whose credo, according to their website, is to “create innovative solutions and experiences, through the best thinking, strategy, design and engineering”. 7EGEND designed the websites for Valencia FC as well as the store for the Portuguese national team.

bitcoin train

Multiple businesses

CR7, as he is fondly called has well-known businesses and investments in fashion, namely high-end underwear and luxurious fragrances. His underwear line, CR7 underwear sell briefs, trunks, socks for men and boys. He also has a footwear brand that deals with a diverse product range including boots, slippers, casuals, as well as belts, wallets and bags.

Binance

Ronaldo does fragrances too. He is actively involved in the ideation, design, branding, as well as production of the different fragrances, selling other products such as aftershaves, shower gels, deodorants, as well as other men’s grooming products. There is also the CR7 Museu, a museum in his native Madeira. It showcases over 100 trophies and medals he has won in his prestigious career till date.

One Last Thing…

Ronaldo has earned praise for his remarkable 19-year football career but even more, praise should go his way for the way he has been able to manage himself off-pitch, which means that if he decides to retire today, he has his pick of what could be the next career for him. An astute businessman indeed.

Jaiz bank ads

 

Written by Ademola Kadiri

Coronation ads
Continue Reading



Advertisement





Nairametrics | Company Earnings

Access our Live Feed portal for the latest company earnings as they drop.