Since the report released by Citron Research during May 2019 (and a subsequent video citing ex-JUMIA executives), JUMIA Technologies' share price on the New York Stock Exchange has been nowhere near its high of $49. This is despite the company reassuring analysts, investors, and journalists that it is performing well.

One notable voice that has been missing throughout this period has been that of JUMIA's largest single shareholder, MTN Group.

Previously the pan African telecommunications company has referred all questions to JUMIA and refusing to comment. However, with recent rumours that Rob Shuter, CEO of MTN Group, was allegedly in New York to answer questions in relation to a class action lawsuit filed against JUMIA, MTN has finally broken their silence in a chat with iAfrikan.

MTN will divest out of JUMIA

iAfrikan: Does MTN Group have any comments on the recent claims made against JUMIA Technologies (JUMIA) that it presented false information and data to investors?

MTN Group Spokesperson: We do not have any comment on this. This is a matter for Jumia.  We note the comments made by the Company and its management team in response to the claims.

Once the investment lock-out period of the New York Stock Exchange is over, will MTN Group be selling some or all its shares in JUMIA?

There is an agreed lock up for the shareholders.  Once the lock up is over we  will apply our minds as to the position.  In March [2019], we announced our overall Asset Realisation Plan to target capital release of ZAR15bn over the next 3 years, and as part of that we said that we will look to  monetise our investments in ecommerce assets over time.

What is MTN Group’s thesis for investing in JUMIA?

Originally the investment was a way for MTN to invest in and assist in the growth of the digital ecosystem across the continent.  Now that has developed, MTN is more focussed on its ongoing commercial relationship with JUMIA rather than maintaining an equity stake.

There have recently been over 10 class action lawsuits launched against JUMIA and its executives in New York, is MTN Group aware of this and what is your views?

MTN is aware of the action that has been filed against the company and its executives.  This is a matter for the company to respond to. However, we would urge you to check your statement above with the company as we do not believe it to be true.

There have been rumours that MTN Group CEO has been named in one or several lawsuits about JUMIA in the USA, as such  it is also rumored that he is due to go (or has already been) to New York to answer questions around JUMIA, is this true?

Not true, MTN Group CEO and management team were in New York for MTN’s Capital Markets day with analysts and investors.

We are monitoring the situation

So far, talking to both JUMIA and MTN since the Citron report was released has been frustrating and akin to a ping pong match with each company referring us to the other for comment. More frustrating has been how JUMIA cannot come forward with a straightforward answer on the allegations made against them by Citron.

During the Q1 earnings conference call, JUMIA affirmed, on record, that the 40% returns cited by Citron is a normal feature of an e-commerce business. However, on the same call they went to state that the Citron report is false and contains no facts.

This same doublespeak is what was repeated by JUMIA's Abdesslam Benzoutini when he called iAfrikan to explain where they stand regarding the Citron report. Benzoutini, like JUMIA's co-CEO (Sacha Poignonnec), stated that the returns quoted by Citron were normal however re-iterated that the Citron report is false.

On the question of class action lawsuits Benzoutini stated that they hadn't done anything yet as they were monitoring the situation.

Whatever happens regarding the class action lawsuits filed against JUMIA, one thing seems to be quite clear, MTN will liquidate their shares in the company as soon as the lock up period ends.