Olam Group Ltd., a prominent player in the agricultural commodities trading sector, saw its shares plummet to their lowest point in over three years following allegations of a multibillion-dollar fraud in Nigeria.
The company has swiftly responded by denying these allegations and initiating a comprehensive review of the matter.
In a filing to the Singapore Exchange on Monday, Olam Group unequivocally refuted the allegations surrounding its operations in Nigeria, including its subsidiaries, dismissing them as “baseless and inflammatory statements.”
The repercussions of this development were felt immediately as the group’s shares closed 8.6% lower in Singapore—a significant decline, marking the sharpest daily drop since March 2020.
Olam Group’s business interests in Nigeria span a wide spectrum, encompassing animal protein, rice farming, and grains, contributing substantially to its annual revenue, which surpasses $3 billion. Given the gravity of the allegations, the company’s board has taken decisive action by instructing the audit committee to conduct a thorough review, with the assistance of external legal counsel and auditors.
These allegations stem from recent news reports in Nigeria, including one from the Daily Nigerian. Olam Group, however, staunchly maintains that there are no “fictitious Nigerian directors” within Olam Nigeria, and all units under its purview are subjected to audits conducted by the Nigerian member firm of Ernst & Young Global. Additionally, the company firmly denies any involvement with a “network of shell companies.”
Also, Olam Nigeria has affirmed its commitment to cooperating with relevant Nigerian authorities and has responded to all legitimate requests for information related to the ongoing investigation.
However, officials from the State Security Service, reported to be leading the inquiry into the alleged fraud, were not immediately available for comment.
Similarly, Nigeria’s tax authority has yet to respond to inquiries seeking their input on the matter.
The allegations and subsequent actions taken by Olam Group have cast a spotlight on the integrity of its operations in Nigeria, a matter that is of critical importance not only to the company but also to the broader financial community.
As this situation continues to evolve, Olam Group remains dedicated to upholding its commitment to transparency and accountability in its operations, and it will strive to address any concerns raised by the ongoing review.
