Olam Group denies fraud allegations reported in African publications (update)

Olam Group said that it refutes all “baseless and inflammatory statements” made in the articles.

Olam Group VC2 has denied the allegations involving the group’s operations in Nigeria on Sept 11. Despite the denial, its shares, which resumed trading after a morning halt, dropped 11 cents for the day, or 8.59%, to close at $1.17.

As Olam's share price plunged after trading resumed in the afternoon, the company bought back one million shares at just over $1.17 each, bringing the total amount of shares bought back under the current mandate to 14.25 million.

Olam Nigeria was said to be involved in a “mega economic fraud” of over U$S50 billion ($68.13 billion), according to African publications, Daily Nigerian and Prime Business Africa over the weekend.

In a chain of round-tripping foreign exchange deals since 2015, the company, through its special purpose vehicles, SPVs, had booked about US$34 billion with the Central Bank of Nigeria, CBN, as capital importation at official rates,” says the Daily Nigerian in an article dated Sept 8.

In its statement issued on Sept 11, Olam Group said that it refutes all “baseless and inflammatory statements” made in the articles, adding that the numbers mentioned are “manifestly inaccurate and designed to be misleading”.

Based on the group’s audited financial statements, Olam’s cumulative turnover in Nigeria for the FY2025 to FY2022 stood at US$14 billion in total. The figure includes all export, import and domestic sales.

For the same period, Olam Nigeria’s capital importations stood at US$2.4 billion in total.

Further to its statement, the group stressed that there are no "fictitious Nigerian directors" in Olam Nigeria. The group also doesn’t have a “network of shell companies” as stated in the articles

“All Olam Nigeria subsidiaries are formed for a proper corporate purpose and are audited by Ernst & Young Global's member firm in Nigeria,” says the group.

“With regard to the case in the Ivory Coast referred to in the articles, after detailed audit and reconciliation, a sum of CFA francs 2.925 billion (US$5.29 million or $7.2 million) inclusive of transaction costs and tax adjustments was finally assessed and paid in 2021, and not the amount of US$262.7 million referred to in the articles,” the group adds.

“With respect to the disclosures in the articles concerning the US Commodities Futures Trading Commission and the ICE Futures US, these relate to trading activities undertaken by the relevant Olam entities. These matters were settled by Olam with the relevant regulatory authorities without admission or denial of the alleged breaches, and have been previously disclosed by the respective authorities,” it continues.

Finally, the group notes that Olam Nigeria itself has responded to the various requests for information by the authorities and that it will cooperate with further requests.

Olam Group, which has its origins in Nigeria, is now operating in 67 countries with an annual group revenue of US$40.77 billion in FY2022.

Olam’s Nigerian operations continue to be a “significant contributor” to the group with an annual revenue of US$3.11 billion as at FY2022. Olam Nigeria has some 4,500 employees across its businesses including wheat milling, pasta manufacturing and so on over 21 manufacturing plants.

“Olam plays an important role in addressing food security challenges facing Nigeria. We are one of the largest non-oil sector investors in Nigeria,” says the group.

The company's single largest shareholder is Temasek Holdings, which holds 51.15% of the shares, according to its most recent annual report.

Year to date, Olam shares were down more than a fifth. On Sept 18, Keppel REIT will replace Olam on the STI reserve list.

See Also: