African online giant Jumia, part-owned by MTN, has admitted to fraudulent sales
- Jumia, which counts MTN as a shareholder, admitted that 4% of its sales in Nigeria for the first quarter were inflated.
- Sales agents inflated the sales to earn additional commission, and they have subsequently suspended, the company said.
- Jumia owns Zando in South Africa and was listed on the New York stock exchange earlier this year
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Africa’s largest online retailer Jumia, which counts MTN as a major shareholder, on Wednesday admitted to fraudulent sales figures.
Jumia owns clothing seller Zando in South Africa, and operates in 14 African companies, with some four million customers across the continent.
It has uncovered instances of improper orders placed and subsequently cancelled to inflate sales in Nigeria, Bloomberg reported. Marketwatch reported that sales agents inflated the sales to earn additional commission.
Some 4% of first-quarter sales, or sales worth $17.5 million (roughly R265 million), are believed to have been inflated, Jumia said.
Quartz Africa reported that online retailer claimed the fraudulent orders have had no impact on its financial statements, and that the employees involved have since been suspended pending a review.
Jumia was listed on the New York stock exchange in April, at a price of $18.95 - it soon climbed to almost $47.
Following the news of the fraudulent sales on Wednesday, it fell from $14.75 to $12.21. But by Thursday early trading it recovered to around $13.00.
Jumia’s revenue grew to €39.2 million from €24.8 million in the second quarter of 2019, while losses grew substantially to €67.8 million from €42.3 million a year earlier.
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