Investors freak over Olam's CFO resignation
Share prices fell by 5.4% yesterday following the announcement that CFO Krishnan Ravi Kumar has resigned after 20 years of service.
Olam International Limited (Olam) has announced that its CFO Krishnan Ravi Kumar has resigned to pursue a new career outside the Agri-commodity sector.
Ravi has led the corporate finance and treasury function for Olam for nearly 20 years. Meanwhile, Shekhar Anantharaman will be moving into a new and enhanced role as Executive Director – Finance and Business, where he will lead the group’s overall strategy and new business development activities and also oversee the corporate finance & accounts, and investor relations.
Profit-taking on news
Following the announcement of the news, Olam saw a 5.4% fall in its share price yesterday.
OCBC Investment Research however notes that it does not see the resignation as having a material impact on its daily operations as Shekhar is also a veteran in Olam, having spent 20 years there.
"We believe that the resignation news is probably just an excuse to take profit on the stock’s recent jump of 23% over the last two weeks," said analyst Carey Wong.
"Speaking of the recent rally, it is likely due to the announcement of the company’s share buyback program," she added.
As a recap, Olam commenced its share buyback program on 8 Jun, where it can buy up to 10% of its issued share capital, or 244.2m shares, at a maximum price of 105% of the average closing price of the last five market days at the time of acquisition.
As of 19 Jun, Olam has bought back some 21m shares.