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REVEALED: Fraud uncovered in Jumia represented 4% of all transactions in Q1 2019

REVEALED: Fraud uncovered in Jumia represented 4% of all transactions in Q1 2019
August 23
19:27 2019

An internal fraud perpetuated by some staff of Jumia and its JForce team represented 4% of the total transactions carried out in the first quarter of 2019.

This is contained in the half year report released by the company on Thursday.

The company, however, said it has terminated the employment of those involved.

“In the course of this review, we identified several JForce agents and sellers who collaborated with employees in order to benefit from differences between commissions charged to sellers and higher commissions paid to JForce agents.

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“The transactions in question generated approximately 1% of our GMV in each of 2018 and the first quarter of 2019 and had virtually no impact on our 2018 or 2019 financial statements.

“We have terminated the employees and JForce agents involved, removed the sellers implicated and implemented measures designed to prevent similar instances in the future.

“More recently, we have also identified instances where improper orders were placed, including through the JForce program, and subsequently cancelled.

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“Based on our findings to date, we believe that the transactions in question generated approximately 2% of our GMV in 2018, concentrated in the fourth quarter of 2018, approximately 4% in the first quarter of 2019 and approximately 0.1% in the second quarter of 2019.

“This 0.1 % have already been adjusted for in the reported GMV figure for the second quarter of 2019. These transactions had no impact on our financial statements. We have suspended the employees involved pending the outcome of our review and are implementing measures designed to prevent similar instances in the future.”

In an interview with CNBC, Sacha Poignonnec, Jumia’s co-chief executive officer, said the fraud was discovered before Citron made its allegations.

Citron had alleged in a May report that Jumia inflated its sales figures ahead of its listing on the New York Stock Exchange.

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