The opening words of Citron Research 12 pages PowerPoint Presentation has called Jumia—African biggest e-commerce market, an ‘obvious fraud’. This statement provoked a reaction that has caused Jumia’s IPO on NYSE to fall at almost 20%.
There has been a lot of controversy surrounding Jumia’s listing on NYSE. Popular African techpreneurs like Rebecca Enchong have questioned how African Jumia is. This is because the e-commerce company is French owned, German registered and also hires Portugal-based developers. MTN Group, one of the major shareholders in Jumia recently sold their stakes in the company.
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Jumia reported a loss of over $1.1 million between 2017 and 2018 to cyber fraud and robbery a few weeks before the IPO. This was part of the filings they sent to the US Securities and Exchange Commission (SEC). The recent report by Citron might be an avenue for SEC to investigate Jumia for fraud.
Citron reported that about 41% of orders on Jumia were either returned, not delivered or cancelled. They also claim that Jumia failed to include this information in their F-1 filing. Jumia, on the other hand, filed that about 14.45% of their Gross Merchandise Volume were either failed deliveries or returned by consumers in 2018. Citron stated in the report that Jumia’s corporate fraud is well documented by local Nigerian newspapers.
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