Agricultural commodities trader Olam Group has confirmed it paid a bond to secure the release of its director in Nigeria.
The company said Olam Nigeria had informed the group that it had posted a bond for its senior vice president, Prakash Kanth, in relation to allegations that the company was involved in forex fraud in Nigeria.
“The Company wishes to inform that it has been notified by Olam Nigeria that it has posted a bond for Mr. Kanth on or about 5.00 p.m. Nigeria time (midnight Singapore time), to secure the continued cooperation of Mr. Kanth with any legitimate requests from relevant Nigerian authorities for information or assistance,” it said in a statement to the Singapore Stock Exchange where the company is listed.
The investigation was first reported by Daily Nigerian, which said the amount for the bond was N1 billion.
The paper said the company 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 selling the money to other businesses at black market rates. The paper said the practice had gone on since 2015.
Olam denied the amount contained in 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.
Shares continue to fall
On Tuesday, Olam’s shares fell to their lowest level in almost 15 years after the company, which has presence in 67 countries, denied the report.
Following its confirmation of the bond on Wednesday, Olam’s shares fell 9.6% to 1.04 Singapore Dollars amid heavy trading volumes. It recovered slightly to S$1.07 by 1.32 pm Singaporean time.
It was its lowest share price since its return to the Singapore Exchange as Olam Group on Mar 16, 2022, following its last day of trading as Olam International after its restructuring.
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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