Olam Group denies allegations of multi-billion dollar fraud in Nigerian unit, shares see historic slump

Singapore’s Olam Group has strongly denied allegations made in recent media reports regarding its Nigerian unit and associated subsidiaries involvement in a multi-billion dollar foreign exchange fraud.

Nigerian news outlets The Daily Nigerian and Prime Business Africa reported that Olam and their associate firms was being investigated by Nigeria’s secret police for a more than US$50 billion foreign exchange fraud.

They also said Olam allegedly funnelled US$34 billion into the Central Bank of Nigeria through its special purpose vehicles as capital importation at official rates, before round-tripping the foreign exchange by selling to other businesses at parallel market rates.

The company’s units Olam Nigeria and Olam International and their associate firms are being investigated.

On Monday (11 Sep), in a filing to the Singapore exchange, the food and agri-business giant said it “refutes all baseless and inflammatory statements” made in two articles published online last week.

In its statement, Olam has “categorically denies” these allegations and said references to the sums of US$50 billion and US$34 billion were “manifestly inaccurate and designed to be misleading”.

Despite refuting the allegations, Olam’s board has directed its audit committee to review the matter. The group highlighted its compliance with proper corporate practices and its cooperation with relevant authorities.

The report came after the group’s cumulative turnover in Nigeria from FY2015 to FY2022 amounting to US$14 billion, with its value of capital importations for the entire group in the country amounting to just US$2.4 billion.

It emphasised that there were “no fictitious directors” in Olam Nigeria like what Daily Nigerian claimed in its article, nor did it have a “network of shell companies” as stated in the Prime Business Africa report.

“All Olam Nigeria subsidiaries are formed for a proper corporate purpose and are audited by EY Global’s member firm in Nigeria,” said the group.

Additionally, Olam also clarified that references by both reports to its 2021 Ivory Coast incident, where the group was ordered to pay for the repatriation of foreign currency, incorrectly cited the compensation sum as US$262.7 million, as opposed to the actual sum of 2.925 billion CFA francs or US$5.3 million.

Addressing the articles’ mentions of rule violations raised by the US’ Commodity Futures Trading Commission as well as Ice Futures US, Olam said it has settled such matters “without admission or denial of the alleged breaches”.

“Olam Group will continue to monitor and strengthen its compliance process for its trading activities.”

The group added that it has responded to various legitimate requests for information by the relevant Nigerian authorities, and that it will cooperate with any legitimate requests for information or assistance from them.

The publications reported the news on 8 Sept and 9 Sept.

The group issued a trading halt on Monday morning ahead of its announcement and resumed trading at 2 pm on the same day.

Olam Group’s shares tumbled the most in almost five years after the agricultural commodities trader denied allegations of a multibillion dollar fraud in Nigeria and ordered a review into the matter.

The group’s shares slumped around 10%, the biggest intraday drop since October 2018, before paring some losses.

Olam Group’s business in Nigeria ranges from animal protein to rice farming and grains, and contributes more than US$3 billion of annual revenue.

At 4.30pm, Olam Group’s shares dropped SG$0.11 or 8.59% valued at SG$1.17.