KUALA LUMPUR, Singapore-listed food processor Wilmar International Ltd — an 18.8%-associate of Bursa Malaysia-listed PPB Group Bhd — announced that the Indonesian Supreme Court has overturned its acquittal, along with those of two other palm oil giants, in a graft case tied to cooking oil export permits in 2021.
In June, Wilmar deposited 11.88 trillion rupiah (about US$729 million or RM3.1 billion at the time) with the Indonesian Attorney General’s Office (AGO) as a “security deposit” while awaiting the court’s ruling on alleged misconduct between July and December 2021, during a nationwide cooking oil shortage.
The deposit would have been returned if the earlier Central Jakarta Court decision was upheld but could now be forfeited partly or fully following the Supreme Court’s reversal.
In a statement on Thursday, Wilmar confirmed that the Supreme Court ruled against the acquittals of Wilmar Group, Permata Hijau Group and Musim Mas Group after an appeal by the AGO. The appeal involved five of Wilmar’s subsidiaries — PT Multimas Nabati Asahan, PT Multi Nabati Sulawesi, PT Sinar Alam Permai, PT Wilmar Bioenergi Indonesia and PT Wilmar Nabati Indonesia — accused of causing state losses, making unlawful profits, and harming the business sector. According to the AGO, the alleged actions caused losses amounting to 12.3 trillion rupiah (around US$755 million).
Wilmar said the full judgment, including the reasoning and any final award amount, has yet to be released. “While Wilmar respects the decision of the Indonesian Supreme Court, it maintains that the actions taken by the Wilmar Respondents during the cooking oil shortage were in compliance with prevailing regulations and made in good faith. A further announcement will follow once the formal judgment is issued,” the group said. The case comes after Wilmar in July denied separate allegations of selling adulterated rice.
Earlier this month, PPB managing director Lim Soon Huat cautioned that, in a worst-case scenario, Wilmar could face up to RM600 million in financial impact if it loses its appeal, which could translate to about 45 sen per PPB share. However, he expressed optimism that the ruling would be more favourable and noted that no financial provisions have been made at this stage. Despite the uncertainty, Lim assured that PPB’s dividend policy remains unaffected. Wilmar continues to be PPB’s main profit contributor, accounting for RM992 million or 72.5% of its FY2024 profit before tax of RM1.33 billion.
