Olam Group Ltd. shares fell to their lowest level in almost 15 years on Tuesday after the agricultural commodities trader denied allegations of a multibillion-dollar fraud in Nigeria and ordered a review into the matter.
The company, which has presence in 67 countries, said on Monday in a filing to the Singapore exchange where it is listed that it had done nothing wrong, but it was cooperating with Nigerian authorities.
“The Company notes that Olam Nigeria have responded to various legitimate requests for information by the relevant Nigerian authorities, and will cooperate with any legitimate requests for information or assistance from relevant Nigerian authorities,” it said.
The group’s shares closed at 1.15 Singapore Dollars on Tuesday, the lowest since November 2008. The price was 10.9% lower than the closing price on Friday when Daily Nigerian, a newspaper, reported that Olam was being probed by the country’s secret police for alleged foreign exchange round-tripping.
The paper said Olam was investigated for allegedly obtaining huge amounts of dollars from the Central Bank of Nigeria at the official rate, on the pretext of importing foreign exchange to invest in the country, and then selling the money to other businesses at black market rates. The paper said the practice had gone on since 2015.
“Network of shell companies”
Olam denied the report, branding it “baseless and inflammatory”. It denied having “fictitious Nigerian directors” in Olam Nigeria and having a “network of shell companies” through which the huge forex payments were made.
Still, Olam Nigeria said it has responded to, and will continue cooperate in relation to legitimate requests for information by the relevant Nigerian authorities. It also said that given the nature of the allegations, its board has directed the audit committee to conduct a review assisted by external counsel and auditors.
On allegation of a similar wrong behaviour in the past, leading to sanctions by US authorities, Olam said it neither admitted nor denied wrongdoing and the “matters were settled.”
Daily Nigerian editor-in-chief Jafaar Jafaar told Pluboard the paper stood by its report. The State Security Service could not be immediately reached for comment.
Olam Nigeria is involved in wheat milling, pasta manufacturing, integrated feed milling and protein production, rice farming and distribution, tomato farming, catalysing local wheat production, sesame processing, cocoa, cashew and cotton exports and branded packaged foods distribution.
It posted a revenue of US$3.114 billion in 2022.
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