Olam Group Ltd.’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.
The company categorically denies the allegations about Olam Nigeria and its subsidiaries and refutes all “baseless and inflammatory statements,” it said in a filing to the Singapore Exchange Monday. 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 $3 billion of annual revenue. Given the nature of the allegations, the board has directed the audit committee to conduct a review assisted by external counsel and auditors, the company said.
The company was referring to two recent news reports in the African country, including from the Daily Nigerian.
Shares in Olam Group were 7.8% lower by 3:06 p.m. Singapore time, and were on track for the biggest daily decline since March 2020, after sliding for four straight months through August.
There are no “fictitious Nigerian directors” in Olam Nigeria and subsidiaries of the unit are audited by Ernst & Young Global’s member firm in the country, the company said. Olam Group also doesn’t have a “network of shell companies.”
Olam Nigeria has responded to and will continue to cooperate in relation to legitimate requests for information by the relevant Nigerian authorities, the company said.