Olam Group’s stock plummets amid director’s bond controversy and Nigerian probe

SINGAPORE: Singapore-based Olam Group saw a sharp decline in its stock price on today following revelations that its Nigerian subsidiary posted a bond for its director, Prakash Kanth.

In today’s morning, the stock plummeted by SG$0.011 or 9.6% to SG$1.04 amid heavy trading volumes, marking its lowest share price since its return to the Singapore Exchange as Olam Group on 16 March 2022, following its last day of trading as Olam International after its restructuring exercise.

The company, majority-held by Temasek, recovered slightly to SG$1.05 by 3:37 pm, representing an 8.7% decline or SG$0.10.

Prior to the market open, the group said its subsidiary Olam Nigeria posted a bond for Kanth to “secure (his) continued cooperation… with any legitimate requests from relevant Nigerian authorities for information or assistance”.

The commodity trading giant’s statement came after an 11 Sept article published in Daily Nigerian, which reported that Olam Nigeria paid a “humongous” bail bond of one billion nairas (SG$1.9 million) to secure the release of Kanth from remand by the country’s State Security Service (SSS).

Other top executives of the company have reportedly fled the country in the wake of the arrest of the governor of the Central Bank of Nigeria, Godwin Emefiele and his accomplices.

It was reported that the SSS requested the humongous bail bond because of the gravity of the allegations against the company and the amount involved.

A payment slip seen by the newspaper showed that the money was paid into a Treasury Single Account, TSA, domiciled at Access Bank on Monday (11 Sept).

Another document also showed that one of Olam’s many subsidiaries, Micro Feed Nigeria Limited, Lagos, paid the money “in connection with the ongoing investigation of money laundering involving Kanth.”

Kanth, who spent days in the SSS detention facility in Abuja, is Olam’s director of Corporate Affairs and Legal in Nigeria.

It was reported that the SSS opened probe into Olam’s multibillion-dollar FX deals from 2015 to date.

The Nigerian secret police is also requesting from Olam evidence of payment of tax, corporate tax income, VAT, export proceeds and capital importation by the company and its subsidiaries during the period under review.

The SSS also requested from the company an analysis of all forex outflows from 2015 to date, showing commercial banks involved and the beneficiaries of the forex and the Bureau de Change, BDC license issued to Olam Nigeria Limited or any of its subsidiaries.

The service also requested records of the company’s expatriate quota; list of the approved expatriates and; particulars of serving and former MDs, CFOs and financial controllers of the company, including their names, addresses and countries of residence.

Although Olam had countered the expose, denying wrongdoing in a statement on Monday, security sources and FX players said the company had questions to answer regarding forex fraud.