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$17 million fraud rocks Jumia as company battles with several US lawsuit

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Jumia is currently involved in some issues which are threatening its corporate existence. The company is facing class-action lawsuits in the United States as a member of its staff engaged in fraud worth $17.5 million and the company’s financial report revealed that its loss grew by 59.2% in one year. 

Jumia’s staff and some members of the Jumia Force (Jumia’s agents) were said to have inflated the volumes of order on the marketplace. 

Although Jumia claimed the fraudulent activity didn’t affect its figures in the financial statement, the improper order accumulated to $17.5 million in Gross Merchandise Volume (GMV) value between Q4 of 2018 to Q1 and Q2 of 2019. 

Why GMV matters: GMV is the metric used by e-commerce companies to identify the total values of merchandise sold through their online platforms 

Jumia reportedly adjusted its GMV figures for Q2 2018 financial report due to the internal fraud the company discovered. 

The fate of the staffs who were involved in the improper orders is not known yet, as the company is still reviewing the case. The suspects have, however, been suspended pending the outcome of the probe. 

Mastercard buys Jumia shares, Jumia get $56 million from Mastercard, Jumia NYSE IPO listing, MTN, Jumia Investors
Jumia store

Why the improper fraud: Such unethical activity is not new in the corporate environment. Workers usually embark on fraudulent activities to meet their companies’ demand/target and navigate through office pressure. One of the most recent was the account scandal that hit one of the biggest banks in the United States, Wells Fargo, in 2016. 

The company sacked 5300 employees for secretly opening two million bank and credit card accounts without the customers’ knowledge while the customers were charged for accounts they didn’t openWells Fargo received the unwarranted fees while the sacked workers made more money and boosted their sales figures. 

Financial mess: Despite Jumia’s topline, active customers, marketplace revenue and gross profit grew within the year, the company’s growth was overshadowed by its net losses which significantly increased by 59.2% between last year and this year. 

The highlight of Jumia’s financial statement

  • Jumia’s topline second-quarter revenue grew to €39.2 million from €24.8 million a year ago.  
  • Net losses increased significantly from €42.3 million last year to €67.8 million this year. 
  • Active customers grew by 500,000 to hit 4.8 million in Q2 of 2019 when compared to Q1 of 2018. 
  • GMV increased by 69% year-on-year. 
  • Marketplace revenue grew 90% year-on-year. 
  • Gross profit according to Jumia also surged by 94% year-on-year. 
  • Jumia’s stocks drop by 13% as at yesterday’s trading. 

Note that since entering the e-commerce business in 2012, Jumia has lost N362.3 billion ($1 billion) in total. 

Jumia Food

Class action lawsuit: The problem with the inflated numbers that arose from the improper orders of Jumia’s staff is that it increased the trust issues Jumia is struggling with among investors since listing its shares in the United States. 

Jumia has been accused of disclosing misleading information to favour the company and portray them as a healthy company to investors. This has led to class action lawsuit centered on “alleged misstatements and omissions” in its Initial Public Offering prospectus. 

While the lawsuit is still in its early stage, the accusations have been taking a toll on Jumia’s stock in the New Yock Stock Exchange (NYSE) where it had opted for an unusual listing of its sharesJumia’s stock price had peaked at $49.77 when it debuted. It has, however, crashed to N12.27 today (at the time of this report) although it was $12.21 yesterday, August 21, 2019.

Identity problem: Jumia also has an identity problem apart from the speculations of misinformation that has dragged down the brand on the Stock Exchange. While Jumia had positioned itself as an African e-commerce platform over the years, it was only after it listed on the NYSE that it was revealed that the company is a German registered company. The identity of the company has further caused confusion as many still don’t know if it is a Nigerian company or not. 

Culled: https://nairametrics.com

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Business

Court Order: Fidson To Pay N4m Over Seizure Of Ex-Staff’s Certificate

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Fidson

Justice Abiola Adewemimo of the Benin Judicial Division of the National Industrial Court of Nigeria has ordered Fidson Healthcare Plc to pay the sum of N4 million to its former employee, Mr. Obateru Olufemi Abidemi, for illegally withholding his first-degree certificate despite asking for it to be returned to him.

Business Post reports that Mr. Abidemi worked with Fidson as a pharmacist for over two years and one of the conditions for getting the job in August 2007 was for him to deposit his Bachelor of Pharmacy degree certificate with the company.

Fidson Healthcare

However, trouble started after he resigned in December 2009 and his three letters to Fidson between 2013 and 2016 demanding the return of his original certificate were ignored.

This forced him to file a complaint before the court in January 2018, claiming his fundamental right had been violated by the defendant.

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He also said the refusal of the drug-making company has made him suffer psychological trauma, mental pains, distress, embarrassment, and inconvenience. He, therefore, asked the court to direct the company to return his certificate and pay him the sum of N5 million as general damages.

But Fidson, in its defence, denied all the allegations, saying it held the certificate because the claimant had outstanding indebtedness of N9.234 million after reconciliation of the accounts.

According to Fidson, on several occasions, the claimant sold goods to customers and refused to remit the proceeds to the company as a result of which, he was asked to proceed on two weeks suspension without pay with effect from July 7, 2009.

The company informed the court that on December 28, 2009, the claimant suddenly resigned his appointment without clearing the alleged debt, which the claimant denied.

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In her ruling, Justice Adewemimo dismissed Fidson’s counter-claim, emphasising that, “The refusal of the defendant to release to the claimant, his original Bachelor of Pharmacy certificate is unlawful.”

The judge further held that “The defendant is hereby ordered to within 72 hours of this judgment, release to the claimant, his Bachelor of Pharmacy certificate.

“The defendant is hereby ordered to pay to the claimant the sum of N4,000,000 (Four Million Naira) as general damages.

“All judgment sums awarded in this suit shall be paid within 30 days failure upon which it will attract a 10% interest per annum.

“A cost of N200,000.00k cost is hereby awarded against the defendant.”

 

Culled: Business Post

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Richard Quest Visit Management Of Fidelity Bank Plc

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CNN Anchor, Richard Quest (left) engaging with Managing Director/CEO, Fidelity Bank, Nnamdi Okonkwo on SME lending and leveraging digital channels to deepen financial inclusion in Nigeria… Monday

CNN Anchor, Richard Quest, paid a courtesy visit on the Management of Fidelity Bank Plc on Monday, February 12.

During the visit, he engaged the team on several issues including SME lending and leveraging digital channels to deepen financial inclusion in Nigeria.

www.theoctopusnews.com, presents pictures from the event.

(more…)

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3,000 Undergraduates Benefit From Fidelity Youth Empowerment Programme

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Fidelity Bank Plc, has trained over 3,000 undergraduates from various tertiary institution on skills acquisition through its youth empowerment programme. Nnamdi Okonkwo, the bank’s CEO made this disclosure Friday during the closing ceremony of the Fidelity Youth Empowerment Academy (FYEA) held at the Sokoto State University (SSU) in Sokoto.

“The students were drawn from the 5 institutions that have benefitted from the banks youth empowerment initiative that aims to teach vocational and entrepreneurship skills”, he stated.

Okonkwo who was represented by the Head, Corporate Social Responsibility (CSR) and Sustainability, Fidelity Bank, Mr. Chris Nnakwe called on Nigerian youths to embrace entrepreneurship and create wealth for themselves instead of searching endlessly for non-existing paid jobs.

Organised as part of the bank’s CSR intervention, Nnakwe pointed out that the programme now in its 7th edition seeks to empower the Nigerian undergraduate with skills and enterprise training, which are relevant for self-reliance.

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He stated that the bank had organised the programme in various institutions of higher learning including the University of Nigeria, Nsukka; Waziri Umar Federal Polytechnic, Birnin-Kebbi; Federal Polytechnic Oko, Anambra State; Rivers State University of Science and Technology, Port Harcourt; Bayero University, Kano and Nnamdi Azikiwe University, Awka.

For the Sokoto edition, Nnakwe stated the bank has expanded the scope of the programme in a bid to accommodate new areas of vocational training. Apart from the typical training on tailoring and make-up, he noted that participants were also provided with requisite skills and first-hand knowledge in Fashion Designing, Cloth Embellishment, Cocktail and Phone Engineering among others. “We in Fidelity Bank have targeted programmes on education, environment and youth empowerment. This one you are witnessing today is part of fulfilling our promises to the society,” Nnakwe said.

According to him, the youths were trained to acquire skills to enable them to become self-reliant and also make them employers of labours even while in school. He disclosed that at the end of the training, starter packs would be given to each participant to enable him or her to commence business.

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Speaking earlier at the opening ceremony, the Governor of Sokoto State Aminu Tambuwal, thanked Fidelity Bank for choosing the school for the programme. Tambuwal, stressed that as a responsible government his administration has prioritised the welfare of the youths in the state. He enjoined the participants to stay focused and concentrate in order to benefit from the training.

In the same vein, the Vice Chancellor, Sokoto State University, Prof. Sani Dangogo, thanked Fidelity Bank for the gesture, saying the training would go a long way in alleviating the financial burden of the students.

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