Connect with us

Business

Olam Group denies allegations of multi-billion dollar fraud in Nigerian unit, shares see historic slump

Singapore’s Olam Group vehemently denies allegations from Nigerian news outlets that its Nigerian unit and subsidiaries are involved in a multi-billion dollar foreign exchange fraud. The company refutes the claims, calling them baseless and inflammatory. Despite this, Olam’s board has ordered an audit committee review. Olam emphasizes its compliance with proper corporate practices and cooperation with relevant authorities.

Published

1 year ago

on

Singapore’s Olam Group has strongly denied allegations made in recent media reports regarding its Nigerian unit and associated subsidiaries involvement in a multi-billion dollar foreign exchange fraud.

Nigerian news outlets The Daily Nigerian and Prime Business Africa reported that Olam and their associate firms was being investigated by Nigeria’s secret police for a more than US$50 billion foreign exchange fraud.

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.

The company’s units Olam Nigeria and Olam International and their associate firms are being investigated.

On Monday (11 Sep), in a filing to the Singapore exchange, the food and agri-business giant said it “refutes all baseless and inflammatory statements” made in two articles published online last week.

In its statement, Olam has “categorically denies” these allegations and said references to the sums of US$50 billion and US$34 billion were “manifestly inaccurate and designed to be misleading”.

Despite refuting the allegations, Olam’s board has directed its audit committee to review the matter. The group highlighted its compliance with proper corporate practices and its cooperation with relevant authorities.

The report came after the group’s cumulative turnover in Nigeria from FY2015 to FY2022 amounting to 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 Prime Business 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.

Additionally, 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.

The publications reported the news on 8 Sept and 9 Sept.

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

Olam Group’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 group’s shares slumped around 10%, the biggest intraday drop since October 2018, before paring some losses.

Olam Group’s business in Nigeria ranges from animal protein to rice farming and grains, and contributes more than US$3 billion of annual revenue.

At 4.30pm, Olam Group’s shares dropped SG$0.11 or 8.59% valued at SG$1.17.

Related Topics:
Continue Reading
Click to comment
Subscribe
Notify of
0 Comments
Newest
Oldest Most Voted
Inline Feedbacks
View all comments

Business

Taiwan’s FSC rejects CTBC Financial’s bid to acquire Shin Kong Financial, favoring Taishin’s merger plans

Taiwan’s Financial Supervisory Commission rejected CTBC Financial’s tender offer to acquire Shin Kong Financial, raising concerns about its plan, while Taishin Financial moves closer to a merger with Shin Kong. Both companies have scheduled shareholder meetings for 9 October.

Published

3 days ago

on

17 September 2024

By

On 16 September 2024, Taiwan’s Financial Supervisory Commission (FSC) rejected an application from CTBC Financial Holding Co. to launch a tender offer for Shin Kong Financial Holding Co., potentially clearing the path for Taishin Financial Holding Co. to proceed with its proposed merger with Shin Kong Financial.

Jean Chiu, vice chairperson of the FSC, stated at a press conference that CTBC Financial failed to provide a comprehensive implementation plan for the acquisition. CTBC had proposed acquiring between 10% and 51% of Shin Kong Financial’s shares initially, with plans to later fully integrate the company.

However, the FSC raised concerns over CTBC’s lack of detailed provisions on how it would manage various potential outcomes, particularly if it failed to secure full control of Shin Kong.

Additionally, the FSC highlighted gaps in CTBC’s understanding of the financial health of Shin Kong’s life insurance subsidiary, as well as a lack of firm commitments regarding raising the capital size of this subsidiary.

This uncertainty, combined with the method of payment proposed by CTBC—using a mix of cash and its own stock—raised concerns that the tender offer could negatively affect shareholders due to potential fluctuations in CTBC’s stock price during the transaction process.

CTBC’s proposal, announced on 20 August, included an offer of NT$4.09 (US$0.13) per share in cash and an exchange of 0.3132 CTBC shares for each Shin Kong share, amounting to NT$14.55 (US$0.46) per share. This bid was labeled by Taishin Financial as a hostile takeover attempt, as Shin Kong Financial’s board had not approved the offer.

In response, Taishin Financial, which has been vying for Shin Kong through a merger, revised its stock swap offer on 11 September.

The new offer included 0.672 Taishin shares plus 0.175 preferred shares for each Shin Kong share, translating to NT$14.18 per share—closer to CTBC’s offer. Taishin had earlier disclosed on 22 August its original plan to offer 0.6022 shares of its stock per Shin Kong share, which amounted to NT$11.32 (US$0.36).

Chiu emphasized that tender offers based on stock payments are rare in Taiwan, with only six cases since the 2002 revision of tender offer regulations.

She referenced Fubon Financial Holding’s acquisition of Jih Sun Financial in 2023, where cash was used instead of shares, to highlight how tender offers have traditionally been handled in the local market.

Chiu concluded by stating that although Taiwan’s financial market operates on free-market principles, takeovers should avoid disrupting market order and respect corporate stability.

Taishin Financial and Shin Kong Financial are set to hold a special general meeting on 9 October to secure shareholder approval for their merger plan, which will then require the FSC’s endorsement.

Continue Reading

Business

Times Bookstores to close after nearly four decades in Singapore

Times Bookstores will cease operations in Singapore after nearly four decades, with its final outlet at Cold Storage Jelita closing on 22 September 2024. The closure is seen as being attributed to high rents, low sales, and rising operational costs, reflecting challenges faced by physical bookstores in Singapore.

Published

4 days ago

on

16 September 2024

By

Times Bookstores will end its operations in Singapore after nearly 40 years, as its last remaining outlet at Cold Storage Jelita on Holland Road is set to close on 22 September 2024.

In a farewell statement posted on Instagram on 16 September, the English book retailer, established in 1978, invited customers to visit the store one final time. “Our happily ever after has finally come,” the post read. “It is with both a heavy heart and a sense of fulfilment that we announce the closure of Times Bookstores.”

The closure of Times Bookstores has been anticipated for several years. The company, owned by regional consumer group Fraser and Neave Limited, closed its branches in Plaza Singapura and Waterway Point in February 2024.

The shutdowns triggered a discussion in Singapore’s literary community about how to better support bookstores.

Struggles Facing Book Retailers

Times Bookstores has been affected by increasing rent, low sales, and rising operational costs. The Covid-19 pandemic exacerbated its challenges, with the business quietly closing outlets at Marina Square and Paragon in 2021.

A key warning came in 2019 when the retailer closed its 8,000 sq ft Centrepoint branch, once one of Singapore’s largest bookstores.

These closures reflect a broader struggle for physical bookstores in Singapore. Rising rent, higher goods and services taxes (GST), and increasing printing costs have driven book prices up, making it difficult for traditional retailers to compete.

Popular bookstore also shut its Marine Parade outlet on 18 June 2023, citing similar reasons, while Books Kinokuniya closed its JEM branch on 9 May 2022 due to slow sales and rental costs.

Future of Singapore’s Bookstores

Following the closure of Times, few large bookstore chains remain in Singapore. Books Kinokuniya, the largest bookstore in Singapore, continues to operate its flagship store at Takashimaya Shopping Centre.

According to a spokesperson from Toshin Development Singapore, cited by the Straits Times, Kinokuniya remains a key tenant, though no specific renewal dates were disclosed. The spokesperson added that Kinokuniya continues to engage with the landlord regularly to appeal to patrons and remain in trend.

Although Times Bookstores will no longer have physical stores in Singapore, its book distribution business, which supplies books from international and local publishers to other retailers, continues to operate.

Continue Reading

Trending