Olam Set for Worst Week Since 2012 After Nigeria Fraud Claims - BLOOMBERG
SEPTEMBER 15, 2023
BY Bloomberg News
(Bloomberg) -- 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.
Shares in the Singapore-based agribusiness are down around 15% 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% 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.
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% 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.”