• Wednesday, February 21, 2024
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BusinessDay

Olam shares near 15-year low on Nigeria fraud claims which it denies

Olam shares surge the biggest ever after finding no evidence of FX fraud in Nigeria

Olam Group Ltd. shares have tumbled the most in more than a decade this week following fraud allegations in Nigeria, adding to a year of setbacks for the company that includes a profit slump and IPO delay.

According to Bloomberg, shares in the Singapore-based agribusiness are down around 15 percent this week, set for the biggest weekly loss since May 2012.

Olam Group settled at the lowest in almost 15 years on Thursday and is close to slipping under the S$1 mark.

Olam Group denied the fraud allegations that were reported in local Nigerian media and the company’s board has ordered a review into the matter.

The group’s business in the African country ranges from animal protein to rice farming and grains, and contributes over $3 billion to annual revenue.

It’s already been a tumultuous year for Olam Group. The company’s first-half profit sank about 90 percent due to lower crop yields from its almond orchards, and a planned initial public offering of its Olam Agri unit in Saudi Arabia has been delayed until 2024. The IPO was initially planned for the first half.

Read also: Olam denies $50bn forex fraud allegations

A decade ago, short-seller Muddy Waters LLC questioned Olam Group’s business model, which eventually led to a takeover by Singapore’s Temasek Holdings Pte. The state-owned investment fund holds about 51 percent of the company.

Olam Group flagged the Nigeria allegations on Monday, and on Wednesday, said that its unit in the African nation had posted a bond for director Prakash Kanth to secure his cooperation with “any legitimate requests from relevant Nigerian authorities for information or assistance.”