Jumia confirms existence of lawsuits filed against it

Jumia in its second quarter (Q2) report has confirmed that there has been some lawsuits filed against the firm and some of its officers but said the cases remained in its preliminary stages. 

The claims, which range from alleged misstatements and omissions in initial public offering prospectus and statements, were filed in the U.S. District Court for the Southern District of New York and the Kings County Supreme Court in New York. 

According to Chief Executive Officer, Jumia Nigeria, Juliet Anammah, the firm received information alleging that some of its independent sales consultants, members of the Jumia Force (JForce) program in Nigeria, may have engaged in improper sales practices.

The reports lead to a review of sales practices from January 1, 2017 to June 30, 2019. It was discovered that some JForce agents and sellers collaborated with employees to benefit from differences between commissions charged to sellers and higher commissions paid to JForce agents. 

She however noted that all those who were involved in the fraud has been identified and their appointments terminated, adding that measures to prevent similar instances in the future has been implemented.

The firm has also disclosed it recently uncovered instances of improper orders placed and subsequently cancelled on its platform wrongly inflating its order volume.  

Anammah noted that amid the challenges, the firm recorded 94 percent increase in gross profits. She added that marketplace revenue increased by 89.7 per cent in the second quarter of 2019 compared to the second quarter of 2018.