From the comments and emails, many are still confused what the real deal is with regards to the “fraud” accusation against Jumia. As I have noted, Jumia is not a fraud – the short-seller is doing what they do well which is largely legal in America. However, Jumia might have made the BIGGEST typo that could cost it $3.9 billion as recorded on its first day of trading.
Yes, the discrepancy on the 2017 Active Customers and 2017 Active Merchants to (confidential) private investors and what it had on the SEC F-1 form is the smoking gun. For the customers, Jumia allegedly inflated the number by 600,000 people. In the merchant, extra 10,000 merchants were allegedly added. Because these presentations were prepared in Oct 2018 (private investors) and April 2019 (public investment in NYSE) on Dec 31, 2017 numbers, the mistake will be hard to explain out. You did not catch the error in Oct 2018 but you picked it in April 2019?
From the report
Then, if Jumia claims typo, SEC will ask it to copy its email server and handover for investigation. They will dissect the server to see if there were plans to manipulate the numbers. That one can take many people to jail if they find out.
Smoking gun is never good – it typically leads to bad things. If Jumia cannot address the discrepancy, it has lost even before it begins. Simply, they will not believe anything about this company, ever.
The problem now is that Jumia has suddenly become a Nigerian company, not a German company as was postulated on the IPO day. Germany celebrates wins, Nigeria picks the scandals. Very unfortunate!
I have explained the biggest issue in the Germany’s Jumia “fraud” accusation. Despite what they are writing, making Jumia now a Nigerian company, the people who produced that report are Germans, in Germany. Germany cannot win IPO and Nigeria now to pick the scandals: it will not happen. Germany, take your company – the IPO and the “fraud”. (LinkedIn summary)