TCL LIVE | Busted? OLAM’s Troubles in Nigeria

TCL LIVE | Busted? OLAM’s Troubles in Nigeria

Episode 132 of #TheChocolateLifeLIVE is LIVE from 10:00 AM PDT / 1:00 PM EDT on Friday, September 15th.

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Episode Overview

In this episode of TheChocolateLifeLIVE we will be introducing participants to a breaking scandal of major proportions that is rocking the worlds of big cocoa and big chocolate. To wit: The Nigerian subsidiaries of Olam International – a Global 500 company and one of the largest cocoa traders in the world – stand accused of massive financial fraud.

OFI (Olam Food Ingredients) is a wholly-owned subsidiary of Olam International and is one of the world’s largest cocoa traders.

An IPO for OFI, scheduled for 2022, has been postponed in part because of market instability caused by the war in Ukraine.

Listed on the Singapore stock exchange, Olam International’s major investors include the Singaporean government’s investment fund Temasek Holdings and Mitsubishi Corporation (Japan).

Olam’s beginnings are rooted in a dynastic family business, Kewalram Chanrai Group (“KCG”), founded in India in the mid-19th century. For decades, KCG did business in Nigeria as the owner/operator of department stores selling mostly household goods and electronics.

In the 1980s, the Nigerian Central Bank changed its foreign exchange (Forex) policies, forcing KCG to change the way it did business in Nigeria if it wanted to export cash to its owners outside of Nigeria.

From Wikipedia: In 1989, the Kewalram Chanrai Group established Olam Nigeria Plc to set up a non-oil-based export operation out of Nigeria to secure hard currency earnings to meet the foreign exchange requirements [for international companies with operations] in Nigeria. The success of this operation resulted in Olam establishing an independent export operation and sourcing and exporting [other] agricultural products. The Group's agri-business was headquartered in London until 1996, and operated under the name of Chanrai International Limited. The business began with the export of cashews from Nigeria and then expanded into exports of cotton, cocoa, and shea nuts from Nigeria.

VERY recently, Nigeria’s State Security Service (“SSS,” aka Department of State Services, “DSS”) have alleged that Olam Nigeria Ltd and its subsidiaries perpetrated a scheme to defraud the Nigerian government of revenues associated with foreign exchange transactions.

In a chain of round-tripping foreign exchange deals since 2015, the company, through its Special Purpose Vehicles (SPVs), booked about US$34 billion with the Central Bank of Nigeria (CBN), as capital importation at official rates.

But instead of investing the money into the Nigerian economy, sources said the company round-tripped the Forex and sold to business men, especially oil and gas marketers and industries at parallel market rates.

Although some of the companies have fictitious Nigerians as directors, the accounts are solely managed by [directors of Olam], some of whom are based in Europe and Asia.

Olam vigorously denies that it has done anything that is not strictly by the books.

However, sources inside Nigeria tell me that the allegations are almost certainly provable if the case were ever to go to court. In the meantime, one of the local directors of Olam Nigeria Ltd has posted an N1 billion (Naira) appearance bond (about US$1.3 million). My sources also say that the proceeds of the scheme are likely no longer in the country, perhaps scattered among financial safe havens or in Singapore. Should a settlement agreement as a part of a consent decree be reached, this might make the repatriation of the disgorgement of profits more challenging.

When I was in Nigeria (in Ikom in Cross River State) in September 2021, I had conversations with the head of the cocoa producers’ union about some of the internal market dynamics in Nigeria. I was told that Olam is a (if not the) dominant player in cocoa in Cross River, if not in all of Nigeria, and it uses its dominance to influence the prices it pays to farmers. One of the ways they do this, I was told, is allegedly predatory micro-lending practices that may consist of cash and/or agricultural inputs such as fertilizers or pesticides to individual farmers who are then obligated to sell the cocoa to Olam. When the farmer goes to sell the cocoa to Olam, they may find that the amount they are actually paid is much lower than what was “promised.”

While illegal child labor and slavery are not widespread in Nigeria (if present at all), practices like the ones Olam is alleged to have perpetrated serve to keep tens if not hundreds of thousands of Nigerian farmers – and perhaps millions of farmers in other countries where Olam sources agricultural commodities – mired in poverty, while the owners of the company and its investors pocket billions in profits by unfairly taking advantage of their superior financial and power positions.

Nigeria Photoblog
My first-ever trip to Africa was to Nigeria. I went to install and train on chocolate equipment in a factory in Ikom, about 25km from the Cameroon border in the state of Cross River.

EXCLUSIVE: Nigerian secret police, SSS, investigates Olam, 10 other subsidiaries over multi-billion dollar forex fraud — Daily Nigerian
The State Security Service, SSS, is investigating a mega economic fraud involving Olam Nigeria Limited, Olam International and their nine subsidiaries to the tune of over $50billion, DAILY NIGERIAN can authoritatively report. In a chain of round-tripping foreign exchange deals since 2015, the compan…
Multibillion dollar FX fraud: Olam Nigeria pays N1billion bail bond to secure release of director — Daily Nigerian
Olam Nigeria Limited has paid a huge bail bond of N1billion to secure the release of one of its directors, Prakash Kanth. The payment was made into a special recovery account operated by the State Security Service, SSS. Other top executives of the company have reportedly fled the country in the wake…
The official exchange rate between Naira and the US$ on Sept 12th was just above 760:1. For context, the 1 billion Naira bond mentioned in the article above converts to around US$1.32 million.
Olam Group denies reports of multi-billion dollar forex fraud in Nigeria, shares slump
Singapore’s Olam Group on Monday denied reports by the Nigerian media last week, alleging that its units in the African country were involved in a multi-billion dollar foreign exchange fraud.
Olam Denies Allegations of Fraud in Nigeria and Orders Review
Olam Group Ltd.’s shares tumbled the most in over three years after the agricultural commodities trader denied allegations of a multibillion dollar fraud in Nigeria and ordered a review into the matter.
What is Olam’s legacy in Nigeria?
There is a huge gap between recent allegations made against Olam and the reality of the firm’s unwavering commitment to Nigeria and the development of its agriculture sector. The agribusiness firm has been present in Nigeria for more than three decades, modernizing the agriculture sector and providi…
Olam Agri refutes allegations of Nigeria business’ involvement in multi-billion dollar fraud
The company said reports that it funnelled US$34b into the Central Bank of Nigeria are “inaccurate.”
Olam shares slump after allegations of multi-billion dollar fraud in Nigeria
Olam Group Ltd.’s shares tumbled the most in almost five years after the agricultural commodities trader denied allegations of a multibillion-dollar fraud
Olam Group
Explore the food ingredients and agricultural commodities Olam offers customers around the world through our global footprint and team of experts.
Olam International - Wikipedia
List of Indians in Singapore - Wikipedia
Murli Kewalram Chanrai – Heads Kewalram Chanrai Group (“KCG”), one of 5 companies spun off from 150-year-old Chanrai family empire. KCG has interests in textiles, commodities, and real estate. Its Olam Food Ingredietns subsidiary is the world's largest trader of cashews and second-largest trader of cocoa.
Our Members | World Cocoa Foundation
Among WCF’s 100+ members are farm-level input providers, financial institutions, cocoa processors, chocolate makers and manufacturers, farmer cooperatives, cocoa trading companies, ports…

Still More ...

olam | Kennedy’s Confection
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Search Results | Snack Food & Wholesale Bakery
Snack Food & Wholesale Bakery is your best source of production, technology and product news, ideas and solutions for a changing industry.
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You searched for olam - International Confectionery Magazine
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Olam confirms bond posted for director of Nigerian unit amid police probe
Olam has denied media reports that the group and its subsidiaries are allegedly embroiled in a US$50 billion fraud. Read more at
Mentioned in the livestream live chat from Mark @ Blue Spruce Chocolates.
Speakers - London Chocolate Forum
Unless a speaker is added to this list, it is unclear if there will be a discussion about Olam.

Questions? Thoughts? Contribute!

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#OLAM #OFI #FOREX #foreignexhange #fraud
#chocolate #craftchocolate
#cacao #cocoa #cacau
#TheChocolateLife Live #LaVidaCocoa

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