Inside Wilmar's graft probe: How a cooking oil crisis led to a multitrillion rupiah corruption scandal
The company, founded by Singaporean tycoon Kuok Khoon Hong, stands accused of earning unauthorised profits by evading state-imposed export controls that sought to curb a cooking oil crisis and domestic palm oil shortage that rocked Indonesia in 2021 and 2022.
Wilmar was initially acquitted by a lower court in March, but the case is back in the limelight as the Indonesian Supreme Court reviews the earlier ruling.
The Business Times traces the events that led up to Wilmar's corruption probe and its multitrillion rupiah asset seizure.
Jan 18, 2022: Indonesian officials announce that palm oil exporters will be required to obtain permits for exports and to declare how much palm oil they plan to sell domestically.
Jan 19, 2022: A cap limiting cooking oil prices to 14,000 rupiah per litre takes effect. The move is part of government efforts to curb the rise in domestic cooking oil prices, which had shot up as much as 40 per cent from a year earlier, in line with a global palm oil price surge.
A NEWSLETTER FOR YOU
Friday, 8.30 am Asean Business
Business insights centering on South-east Asia's fast-growing economies.
Sign Up
Sign Up
Jan 24, 2022: The requirement that palm oil exporters obtain export permits kicks in.
Apr 19, 2022: The Indonesian Attorney-General's Office (AGO) names four suspects in a corruption case linked to the issuance of palm oil export permits.
One suspect is a government official from the Trade Ministry.
The others are executives from three palm oil producers – North Sumatra-based Permata Hijau Group, Musim Mas Group, and Wilmar's subsidiary, Wilmar Nabati Indonesia.
Apr 28, 2022: Indonesia bans the export of crude palm oil (CPO) and all its derivative products – including cooking oil – to shore up domestic supplies and ease costs, as soaring global CPO prices spur producers to export the commodity instead of selling it at home.
May 23, 2022: The ban is lifted after considering improvements in local palm oil supply and prices, Indonesian authorities say.
Mar 19, 2025: Four judges acquit Wilmar Group and the two other companies of charges of misconduct in obtaining export permits in 2022.
Apr 12, 2025: The Indonesian AGO accuses the judges behind the acquittal of receiving bribes to clear the companies of all charges.
Apr 13, 2025: Three of the judges behind the acquittal are arrested, following the earlier arrest of the fourth judge, who allegedly received 60 billion rupiah to arrange a favourable verdict for the companies.
The three judges are said to have received US$1.07 million in bribes.
Apr 14, 2025: Wilmar maintains its innocence, stating that its actions to increase the supply of palm oil were intended to help the government improve domestic supply and lower prices.
Jun 17, 2025: The corruption case undergoes a review by the Supreme Court, which will determine if the earlier lower court ruling will stand, says the AGO, which appealed the acquittal.
The AGO says the 11.8 trillion rupiah that Indonesian authorities seized from five Wilmar subsidiaries in late May is compensation for state losses arising from the graft case.
Wilmar says the seized assets are a security deposit that will be returned if the Supreme Court upholds the lower court's ruling; should it rule otherwise, the sum may be forfeited in part or in whole.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Asia News Network
33 minutes ago
- Asia News Network
Tax hikes, programme cuts could hit regions as Jakarta pulls funds
August 19, 2025 JAKARTA – President Prabowo Subianto 's focus on funding costly flagship programs, such as free nutritious meals and the Red and White Cooperatives, from next year's state budget could leave regions bearing the brunt, as the government plans to slash regional transfers (TKD) by nearly 25 percent. Experts have warned that the move could strain public services in remote regions and widen inequality. Deni Friawan, an economic researcher at the Centre for Strategic and International Studies (CSIS), argued that shrinking regional budgets would have serious consequences, as many regional governments still rely on transfers from the central government for around 70 to 80 percent of their funds. A smaller TKD means less money for local governments, creating gaps in funding for civil servant salaries, regular programs and local development, according to Deni. He noted that the pressure, as such a shift was also implemented in this year's budget, has pushed some regional governments, such as Pati regency in Central Java to hike land and building taxes (PBB) to cover shortfalls, resulting in widespread protests. 'Since major tax bases remain controlled by Jakarta, regional finances were never truly decentralized,' he said at a press briefing on Monday. According to him, the draft of next year's budget marks another shift toward recentralization, with the central government directing most spending. Deni warned that this could force local governments to either impose new levies or cut distinctive regional development programs, both of which risk weakening local growth. While the TKD is set to plunge by 24.8 percent, central government spending is projected to rise by 17.8 percent. As a result, the share of the state budget controlled by Jakarta is expected to climb from 72 percent in 2021 to 83 percent in 2026, leaving most programs to be designed and implemented by the central government. Meanwhile, regional administrations will have to rely on the Special Allocation Fund (DAK) and the General Allocation Fund (DAU), both of which are already tightly earmarked at Rp 155.1 trillion (US$95.6 million) and Rp 373.8 trillion, respectively. The government is also pushing for a 10 percent rise in state revenue to control the deficit and fund priority programs, with tax collection expected to surge by 13 percent, more than double the usual 5 to 6 percent growth, Deni said. The bulk is expected to come from a 16 percent jump in non-oil and gas income tax, driven by stricter enforcement under the Coretax system, suggesting intensified pressure on existing taxpayers. Over the past five years, tax's share of state revenue has climbed from 77 to 86 percent, while non-tax income, particularly from natural resources, has dropped from 23 percent to 14 percent amid falling commodity prices. 'This stands in stark contrast to [President Prabowo's] pledge that natural resources must benefit the people,' Deni noted. Local fiscal vulnerability Bank Permata chief economist Josua Pardede also warned that the steep drop in regional budgets threatened to widen inequality, with underdeveloped regions like Papua, Maluku and East Nusa Tenggara bearing the brunt of funding cuts, while fiscally independent areas such as Jakarta and East Java remain insulated. Though officials claim the 2026 budget still honors special autonomy for Aceh, Papua and Yogyakarta, the reduced transfers will hit impoverished regions hardest, according to Josua. Long-term risks may include rising social tensions in marginalized areas and widening development gaps, which contradict the state budget's equality pledges. 'The central government is rolling out massive national programs as compensation […] but whether these centralized initiatives can match the localized impact of regional budgets remains doubtful,' he told The Jakarta Post on Monday. Bhima Yudhistira, executive director of the Center of Economic and Law Studies (CELIOS), warned that, combined with fiscal pressures and efficiency demands on the central government, the move to cut the TKD could trigger widespread regional instability. A CELIOS report found that a staggering 58 districts and cities fall into the 'very low fiscal capacity' category, while another 152 rank as 'low capacity,' meaning 41.3 percent of Indonesia's local governments remain financially vulnerable, he explained. With many regional administrations yet to develop creative alternative revenue streams, cash-strapped local governments may resort to hiking easily adjustable taxes, such as the PBB, parking fees and hospitality taxes, to fill budget gaps. 'This could trigger widespread public discontent in 2026,' he told the Post on Monday. After President Prabowo unveiled the draft of next year's state budget before lawmakers on Friday, including the planned cut to the TKD, Home Minister Tito Karnavian called on regional governments to reduce their reliance on central transfers and innovate in local revenue collection. 'Many potential revenue sources, particularly motor vehicle taxes and parking fees, are underutilized across regions. These are areas we can and should optimize through better management,' he said at a press conference on Friday. The former police chief noted that many regions remain dependent on central funds despite some having strong local revenue capacity, urging better fiscal management amid national budget efficiency measures.
Straits Times
an hour ago
- Straits Times
Trump tariffs get seal of approval as S&P affirms US credit rating
Singapore - US President Donald Trump's sweeping tariffs have roiled markets, unnerved trade partners and provoked criticism from leading economists. But there is an upside: The levies will help the United States maintain its fiscal health, according to S&P Global Ratings. The credit rating company has affirmed its AA+ long-term rating for the US, in part because it thinks tariff revenues will reduce the fiscal hit of a recent tax and spending bill. It kept the outlook for the long-term rating stable. The decision offers a glimmer of good news for Mr Trump, who has pushed back against arguments that his historic programme of tariffs will damage the US economy. Although the S&P analysts didn't contradict that view, they stressed that as Mr Trump embarks on a bold programme of tax cuts and spending, tariffs will help soften the blow. 'Amid the rise in effective tariff rates, we expect meaningful tariff revenue to generally offset weaker fiscal outcomes that might otherwise be associated with the recent fiscal legislation, which contains both cuts and increases in tax and spending,' wrote analysts in a note. S&P's views matter for investors in the world's biggest bond market, which has been plagued by persistent questions over the fiscal deficit and debt sustainability. Yields on 30-year Treasuries jumped above 5 per cent in May as tariff fears and Mr Trump's multi-trillion dollar tax bill roiled global markets. Buy America Whether tariffs will give the US a meaningful revenue boost is a subject of debate among economists, who point to an apparent contradiction at the heart of Mr Trump's approach: Tariff revenues rely on trade, but Trump has also attempted to pull production back to the US and encourage consumers to buy American-made products – moves that would undercut future levy receipts. So far, the numbers are strong. Tariff revenue reached a fresh monthly record in July, with customs duties climbing to US$28 billion (S$36 billion). US Treasury Secretary Scott Bessent said tariff revenues for all of 2025 could be 'well in excess of 1 per cent of GDP,' revising his previous estimate of US$300 billion. But the bipartisan Congressional Budget Office estimates the recently passed budget bill will add US$3.4 trillion to the deficit over the next 10 years. Top stories Swipe. Select. Stay informed. Singapore Two China Eastern Airlines planes involved in runway incursion at Changi Airport in Aug 2024 Life Local indie theatre The Projector to cease operations on Aug 19 after a decade Singapore 'I vaped when I woke up until I slept': More youth vaping to cope with stress, say social workers Asia Singaporean man sentenced to 72 years' jail in Malaysia for murdering wife and stepson Singapore 4 days' jail for former pre-school teacher who kicked and bruised pupil's shin Life Disrupted sleep, steroid psychosis: How chronic sinus condition affected one S'pore hawker's life World Trump's art of the 'peace' deal for Ukraine and Russia US 30-year yields were close to flat around 4.94 per cent in Asia trading on Aug 19, while those on benchmark 10-year yields edged higher to 4.34 per cent. That pointed to a muted short-term impact from the S&P report, even if it adds an important voice as traders weigh up the impact of tariffs over the coming months. 'These are still small nuances close to the top of the credit ratings hierarchy and it doesn't signal any material change in the US fiscal health, which is a complex issue,' said Homin Lee, senior macro strategist at Lombard Odier in Singapore. The US lost its last top rating from the big three credit companies in May, when Moody's Ratings lowered the country from Aaa to Aa1. It blamed successive administrations and Congress for swelling budget deficits that it said show little sign of abating. Fitch Ratings and S&P had previously downgraded the US from AAA. S&P said the stable outlook indicates its expectation that while the fiscal deficit won't meaningfully improve, it also won't persistently deteriorate over the next several years. The agency expects net general government debt to surpass 100 per cent of GDP over the next three years, but it thinks the general government deficit will average 6 per cent from 2025 to 2028, down from 7.5 per cent ion 2024. The rating affirmation could be a positive for the US dollar after Trump's tax and spending bill cast doubts on the sustainability of US debt, said Fiona Lim, a senior currency strategist at Malayan Banking. Still, the more lasting driver for the greenback will come from Federal Reserve minutes, as well as Fed chair Jerome Powell's speech in Jackson Hole on Aug 22, she said. A gauge of the dollar edged higher during Asia trading hours on Aug 19. BLOOMBERG
Straits Times
an hour ago
- Straits Times
Rich Londoners baulk at hearing ‘no' in efforts to install air-conditioning units
Sign up now: Get ST's newsletters delivered to your inbox LONDON – As Londoners struggle to adapt to rising temperatures, some of the city's wealthier denizens are finding that money cannot always deliver the relief they seek. With temperatures in some parts of the London Underground recently exceeding levels deemed fit for cattle, climate change is well and truly transforming the experience of living in Britain's capital. The response has been a surge in demand for air-conditioning units in high-end homes. Air-conditioning units used to be an infrequent request, says Mr Richard Gill, director at the London-based architecture firm Paul Archer Design. But nowadays roughly 30 per cent of his clients – mostly London's higher earners, including lawyers and finance professionals – want air conditioning. Not all, however, are getting it. That 'no' can be hard to hear for people who are accustomed to plush climate-controlled offices, foreign travel and cars, Mr Gill said in an interview. For Londoners, obstacles to getting a ir-conditionin g units installed in their homes vary. There can be technical or aesthetic restrictions on attaching units to old buildings. And sometimes, councils simply reject claims of overheating. Mr Gill says he had a client living in a 1920s home in Highgate, north London, who had sought permission to install air conditioning back in 2022, which is the first year the UK recorded temperatures over 40 deg C. The council blocked the request because it judged that the house w ould n ot overheat. The client 'would beg to differ,' Mr Gill said. 'Plenty of my clients go, 'I understand Richard, it is a first world problem, but my kids can't sleep and I work long hours'.' Top stories Swipe. Select. Stay informed. Singapore Two China Eastern Airlines planes involved in runway incursion at Changi Airport in Aug 2024 Life Local indie theatre The Projector to cease operations on Aug 19 after a decade Singapore 'I vaped when I woke up until I slept': More youth vaping to cope with stress, say social workers Asia Singaporean man sentenced to 72 years' jail in Malaysia for murdering wife and stepson Singapore 4 days' jail for former pre-school teacher who kicked and bruised pupil's shin Life Disrupted sleep, steroid psychosis: How chronic sinus condition affected one S'pore hawker's life World Trump's art of the 'peace' deal for Ukraine and Russia Mr Gary Woodward, managing director at north London-based company Airconco, says even though it is clear that properties in large parts of London are now 'extremely hot' during the summer months, existing restrictions prevent or delay installations in 30 per cent to 40 per cent of residential dwellings. In Camden, a north-London borough that includes wealthy neighborhoods such as Hampstead, Primrose Hill and Belsize Park, a family was denied permission for two air conditioning units earlier in 2025 b ecause of noise and 'visual clutter' concerns, according to public documents reviewed by Bloomberg. The application included images of a thermometer showing evening temperatures exceeding 25 deg C in the home's south-facing bedrooms. The family was suffering from a 'massive issue of overheating within a property which is difficult to cool to safe temperatures,' the report submitted by their planning consultant stated. 'The fundamental issue of this application is not one of comfort, but rather safety for the applicants' children.' Ms Claire Coutinho, the Conservative shadow energy secretary who until 2024 was the politician in charge of the UK's energy policy, has been vocal in her criticism of existing regulations, warning that access to air conditioning was being blocked by 'bureaucrats in ivory towers.' In another case, an application for a rooftop unit submitted to Kensington and Chelsea council last year was denied, after neighbors raised concerns it would be too obtrusive, according to documents reviewed by Bloomberg. Aggregate data on air -condit ioning applications in London was no t made available by city authorities. A spokesperson for Camden Council said that applications for air conditioning are assessed against the borough's development plan, with policies covering sustainability, design and noise all taken into account. A spokesperson for Kensington and Chelsea Council said that there were more restrictions than in other areas because three-quarters of the borough is of special architectural or historic interest. The examples show that climate change can be blind to demographic distinctions, including Britain's famed class divide. The UK, which in recent years has had to deal with recurring sewage leaks into its rivers thanks to the mismanagement of its water utilities, is now struggling to deal with rising temperatures that are affecting all its citizens. Though data on air conditioning remains sparse, a 2022 government estimate indicated that less than 5 per cent of British households have it. Meanwhile, 55 per cent of homes in the UK have bedrooms that are overheating, according to an analysis the same year by Arup, a consultancy. Arup, which conducted its study for the UK's Climate Change Committee, concluded that levels of overheating were even higher in London. Small bedrooms, loft rooms and apartments are particularly vulnerable, it said. A separate study published in June found that indoor overheating reported in UK dwellings soared from 20 per cent in 2011 to 82 per cent in 2022. I t is a trend playing out across Europe, where demand for air conditioning is on the rise. 'We are used to having the heating mindset,' says Dr Simon Pezzutto , a senior researcher at the research center Eurac. 'But now with climate change, we need to switch to the cooling mindset – and most cities in northern Europe are not prepared for that.' The world is on track for more than 3 deg C of warming, according to the United Nations. After 2 deg C, roughly one in five British homes will likely need air conditioning to stay within an acceptable temperature range, according to the Arup analysis. The rest should be able to make do with ceiling fans, reflective paint and shutters, it said. Mr Andy Love, founder of Shade the UK, a community interest company which works with government and authorities to manage overheating risk in buildings, says air conditioning can help keep people safe during periods of extreme heat. But he also encourages homeowners to consider other avenues first. Solutions such as external shutters, rarely used in UK homes, are effective and less expensive to install and to run, he said. 'If we jump straight into an air conditioning country, it's a shame,' Mr Love said. Whatever the solution, there are real dangers to overheated buildings. Overheating at night means poor sleep, which as well as being uncomfortable can lead to long-term health problems like immune system damage and higher risk of heart disease. Not being able to cool down at night also reduces the body's ability to cope with longer periods of heat, increasing the risk of dehydration and heat stress. S ome restrictions in B ritain on installing air-conditioning units are slowly being relaxed. For example, the government this year added air-to-air heat pumps – air conditioning units that can both heat and cool – to a list of building work that can be done without asking for permission. And the government is considering adding air-to-air systems to a subsidy program designed to make heat pumps more accessible, in the interest of helping Britain reach its net zero goals. But limits are still in place. Apartments and buildings deemed valuable for conservation or aesthetic reasons – often expensive dwellings inhabited by high earners – still require special permission. 'Those rules were written for a cooler climate and a dirtier grid,' says Mr Sam Richards, a former government adviser and chief executive of Britain Remade, a campaign group. 'Neither of which exist anymore.' BLOOMBERG
