Olam denies media reports of US$50 billion Nigerian forex fraud, sets up review

OLAM Group said it “categorically denies” 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 “refutes all baseless and inflammatory statements” 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 “nevertheless conduct a review of the matter”. 

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 “manifestly inaccurate and designed to be misleading”.

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This is because the group’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 “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.

Olam also clarified that references by both reports to its 2021 Ivory Coast incident – where the group was ordered to pay for the repatriation of foreign currency – 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’ mentions of rule violations raised by the US’ Commodity Futures Trading Commission as well as Ice Futures US, Olam said 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.”

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 Olam : VC2 0% 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.