Connect with us

Business

Olam Group’s stock plummets amid director’s bond controversy and Nigerian probe

Singapore’s Olam Group witnessed a significant stock price drop after its Nigerian subsidiary posted a bond for its director, Prakash Kanth.

The controversy adds to ongoing investigations, raising questions about the company’s financial practices.

The company, majority-held by Temasek, recovered slightly to SG$1.05 by 3:37 pm, representing an 8.7% decline or SG$0.10.

Published

1 year ago

on

SINGAPORE: Singapore-based Olam Group saw a sharp decline in its stock price on today following revelations that its Nigerian subsidiary posted a bond for its director, Prakash Kanth.

In today’s morning, the stock plummeted by SG$0.011 or 9.6% to SG$1.04 amid heavy trading volumes, marking its lowest share price since its return to the Singapore Exchange as Olam Group on 16 March 2022, following its last day of trading as Olam International after its restructuring exercise.

The company, majority-held by Temasek, recovered slightly to SG$1.05 by 3:37 pm, representing an 8.7% decline or SG$0.10.

Prior to the market open, the group said its subsidiary Olam Nigeria posted a bond for Kanth to “secure (his) continued cooperation… with any legitimate requests from relevant Nigerian authorities for information or assistance”.

The commodity trading giant’s statement came after an 11 Sept article published in Daily Nigerian, which reported that Olam Nigeria paid a “humongous” bail bond of one billion nairas (SG$1.9 million) to secure the release of Kanth from remand by the country’s State Security Service (SSS).

Other top executives of the company have reportedly fled the country in the wake of the arrest of the governor of the Central Bank of Nigeria, Godwin Emefiele and his accomplices.

It was reported that the SSS requested the humongous bail bond because of the gravity of the allegations against the company and the amount involved.

A payment slip seen by the newspaper showed that the money was paid into a Treasury Single Account, TSA, domiciled at Access Bank on Monday (11 Sept).

Another document also showed that one of Olam’s many subsidiaries, Micro Feed Nigeria Limited, Lagos, paid the money “in connection with the ongoing investigation of money laundering involving Kanth.”

Kanth, who spent days in the SSS detention facility in Abuja, is Olam’s director of Corporate Affairs and Legal in Nigeria.

It was reported that the SSS opened probe into Olam’s multibillion-dollar FX deals from 2015 to date.

The Nigerian secret police is also requesting from Olam evidence of payment of tax, corporate tax income, VAT, export proceeds and capital importation by the company and its subsidiaries during the period under review.

The SSS also requested from the company an analysis of all forex outflows from 2015 to date, showing commercial banks involved and the beneficiaries of the forex and the Bureau de Change, BDC license issued to Olam Nigeria Limited or any of its subsidiaries.

The service also requested records of the company’s expatriate quota; list of the approved expatriates and; particulars of serving and former MDs, CFOs and financial controllers of the company, including their names, addresses and countries of residence.

Although Olam had countered the expose, denying wrongdoing in a statement on Monday, security sources and FX players said the company had questions to answer regarding forex fraud.

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