Olam Group has denied two news reports that alleged that the commodity trader’s Nigerian units and subsidiaries were involved in a multibillion-dollar fraud.
In a filing to the Singapore Exchange on Monday, the food and agri-business giant refuted the allegations found in the articles published last week by Daily Nigerian and PrimeBusiness.Africa, calling them “baseless and inflammatory statements.”
Both media outlets had reported on Sept.8 and Sept.9 that Nigeria's secret police were conducting an investigation into Olam Nigeria, Olam International, and their affiliated companies for an alleged foreign exchange fraud exceeding $50 billion.
The reports claimed 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.
In its statement, Olam clarified that references to the sums of US$50 billion and US$34 billion were "manifestly inaccurate and designed to be misleading."
The reports also alleged that certain companies had "fictitious Nigerians as directors" and suggested that authorities had identified a network of shell companies connected to Olam, among other allegations.
However, Olam Group 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 PrimeBusiness.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.
Addressing the articles' mentions of rule violations raised by the US’ Commodity Futures Trading Commission as well as Ice Futures US, Olam stated that 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.”
Considering the gravity of the allegations, Olam Group said its board has instructed the audit committee to conduct a review of the matter.
The company said that its unit Olam Nigeria has responded to requests for information by Nigerian authorities and will continue to cooperate.
Shares of the group were down 7.8% at $1.180, as of 0627 GMT, after hitting a record low of $1.150 earlier in the session.
The group issued a trading halt on Monday morning ahead of its announcement and will resume trading at 2 p.m.