Olam Group of Singapore on Monday vehemently denied reports alleging that its subsidiaries in Nigeria were involved in a multi-billion dollar foreign exchange fraud, but did not give details of its entanglement with the Department of State Services (DSS).
“The company categorically denies the allegations in the Articles,” Olam said in a statement, and said it has directed its audit committee to review the matter, with the assistance by external counsel and external auditors.
But the shares of company continued to tumble, the international media has been reporting on different platforms.
At resumed trading on Monday, it’s shares 11 cents, or 8.6 per cent, to $1.17 as at 2.06pm. but the food and agri-business giant said it “refutes all baseless and inflammatory statements”.
Though eye-brows were raised over the humongous figure of US$50 billion mentioned in publications, it is generally believed that the investigation of Olam Nigeria may not be unconnected with the extensive probe of suspended Central Bank of Nigeria (CBN) Governor, Mr. Godwin Emefiele.
At least two deputy governors of the apex bank have been questioned by the DSS.
Olam has said references to the sums of US$50 billion and US$34 billion were “manifestly inaccurate and designed to be misleading”, but it did not give its own figure of the amount it was being investigated over.
The group claims its cumulative turnover in Nigeria from financial year 2015 to financial year 2022 totalled US$14 billion, with its value of capital importations for the entire group in the country amounting to just US$2.4 billion, according to a report on Strait Times.
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 in 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$4.8 million.
Addressing the Nigerian online newspaper articles’ mentions of rule violations raised by the United States’ 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.
Recall that the Daily Nigerian reported last week that the Department of State Services (DSS) is investigating a mega economic fraud involving Olam to the tune of over $50billion.
It said that in a chain of round-tripping foreign exchange deals since 2015, the company, through its Special Purpose Vehicles, SPVs, had booked about $34 billion with the Central Bank of Nigeria, CBN, as capital importation at official rates.
The online publication adds: “But instead of investing the money into the Nigerian economy, sources said the company round-tripped the forex and sold to business men, especially oil and gas marketers and industries such Indorama and Fouani, at parallel market rates.
“Investigation revealed that Olam usually directed the forex buyers to lodge the naira equivalent into the account of one or many of its SPVs during the period under review.
“Although many Nigerians are unaware of the company’s shady deals, investigation revealed that those saddled with the responsibility of managing the country’s economy knew too well as Olam had been investigated by the EFCC but failed to prosecute them due to their alleged link to the ‘cabal’ of the previous administration.
“In one of the deals previously investigated by the SSS (DSS) in 2020, the service advised the CBN to revoke the Certificate of Capital Importation, CCI, but the apex bank authorities ignored the advice.
“While the Nigerian authorities failed to sanction Olam for its various FX infractions, in 2021 Ivory Coast ordered Olam International to pay 142 billion CFA francs ($262.7 million) in connection with the repatriation of foreign currency.
“In 2015, the U.S. Commodity Futures Trading Commission, CFTC, imposed a $3 million penalty against Olam International, Ltd. and Olam Americas, Inc. for violating Cocoa Position Limits and unlawfully executing noncompetitive trades.
“In July this year, ICE Futures U.S. published a disciplinary notice against Olam International Limited for violating Exchange Rule 6.18(b) on February 17, 2022 by establishing positions in the spot month Coffee “C” futures contract that exceeded the contract’s notice period position limit.
“The company agreed to pay a monetary penalty of $30,000 and disgorge profits of $430,950.25.
“Contacted to respond to the allegations against his company and why he is at large, Olam Nigeria country head, Ashish Pande, requested our reporter to reveal how he knew about the investigations.
““But how did you know about all this? Who told you all this? Well, I’m not aware of all this,” he said and hung up.
Mr Pande did not respond to subsequent calls to his number by our reporter.
“Spokesman for the SSS, Peter Afunanya, replied “No comment” to DAILY Nigerian inquiry on the matter.”