OLAM Group&rsquo s shares tumbled the most in almost five years after the agricultural commodities trader denied allegations of a multibillion dollar fraud in Nigeria and ordered a review into the matter.

 

The company categorically denies the allegations about Olam Nigeria and its subsidiaries, and refutes all &ldquo baseless and inflammatory statements,&rdquo it said in a filing to the Singapore exchange on Monday (Sep 11). The group&rsquo s shares slumped around 10 per cent, the biggest intraday drop since October 2018, before paring some losses.

 

Olam Group&rsquo s business in Nigeria ranges from animal protein to rice farming and grains, and contributes more than US$3 billion of annual revenue. Given the nature of the allegations, the board has directed the audit committee to conduct a review assisted by external counsel and auditors, the company said.

 

Shares in Olam Group were 7.8 per cent lower by 3.06 pm, and were on track for the biggest daily decline since March 2020, after sliding for four straight months till August. BLOOMBERG

 

OLAM Group said it &ldquo categorically denies&rdquo allegations made in recent media reports about its Nigerian unit, Olam Nigeria, and its subsidiaries being involved in a multi-billion dollar fraud.

 

On Monday (Sep 11), the food and agri-business giant said it &ldquo refutes all baseless and inflammatory statements&rdquo made in two articles published online by Daily Nigerian and PrimeBusiness.Africa last week. 

 

However, in view of the nature of the allegations made, its board has directed the audit committee to &ldquo nevertheless conduct a review of the matter&rdquo . 

 

Both articles claimed the Department of State Services was investigating Olam Nigeria, Olam Group and its subsidiaries for alleged fraud involving over US$50 billion.

 

They also said 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 said references to the sums of US$50 billion and US$34 billion were &ldquo manifestly inaccurate and designed to be misleading&rdquo .

 

This is because the group&rsquo s cumulative turnover in Nigeria from FY2015 to FY2022 totalled US$14 billion, with its value of capital importations for the entire group in the country amounting to just US$2.4 billion.

 

It emphasised that there were &ldquo no fictitious directors&rdquo in Olam Nigeria like what Daily Nigerian claimed in its article &ndash nor did it have a &ldquo network of shell companies&rdquo as stated in the PrimeBusiness.Africa report.

 

&ldquo All Olam Nigeria subsidiaries are formed for a proper corporate purpose and are audited by EY Global&rsquo s member firm in Nigeria,&rdquo said the group.

 

Olam also clarified that references by both reports to its 2021 Ivory Coast incident &ndash where the group was ordered to pay for the repatriation of foreign currency &ndash incorrectly cited the compensation sum as US$262.7 million, as opposed to the actual sum of 2.925 billion CFA francs or US$5.3 million.

 

Addressing the articles&rsquo mentions of rule violations raised by the US&rsquo Commodity Futures Trading Commission as well as Ice Futures US, Olam said it has settled such matters &ldquo without admission or denial of the alleged breaches&rdquo .

 

&ldquo Olam Group will continue to monitor and strengthen its compliance process for its trading activities.&rdquo

 

The group added that it has responded to various legitimate requests for information by the relevant Nigerian authorities, and that it will cooperate with any legitimate requests for information or assistance from them.

 

Shares of ended S$0.01 or 0.8 per cent higher at S$1.28 on Friday.

 

The group issued a trading halt on Monday morning ahead of its announcement, and will resume trading at 2 pm on the same day.