Wilmar Tumbles After $729 Million Deposit in Indonesia Palm Case
(Bloomberg) -- Asian food titan Wilmar International Ltd.'s shares plunged to their lowest level in more than five years, after the company said several units in Indonesia were pressed to hand over $729 million as a security deposit ahead of a court ruling on a 2022 palm oil export case.
In an exchange filing late Tuesday, Wilmar said its subsidiaries agreed to make the so-called security deposit to the attorney general's office ahead of the AGO's appeal. It added that authorities requested the funds of IDR 11.9 trillion — an amount equivalent to nearly two-thirds of the company's net income last year — to demonstrate the companies' 'good faith and innocence'.
Shares in Wilmar, whose businesses span from China to Southeast Asia, fell by as much as 4% in Singapore. At around 10:30 a.m. local time, the stock was changing hands at S$2.92, down almost 3% and just off its 2020 low.
The deposit is linked to a case in which the Indonesian AGO accused five Wilmar units of wrongdoings during a shortage of cooking oil in the Indonesian market years ago. An Indonesian court panel in March favored Wilmar and two other palm oil traders, but the verdict has been challenged by the AGO with some judges detained for alleged bribery.
Wilmar said its units maintain that actions related to the export of cooking oil during the period in question were in compliance with prevailing regulations. The deposit would be returned to the companies if the Indonesian Supreme Court upholds the earlier court ruling, but otherwise could be forfeited in part or full, the company said.
The 2022 case, which involved a trade ministry official, revolved around the approval of export permits that didn't meet requirements and a failure to meet obligations at the time for domestic palm oil distribution, a government prosecutor said at that time.
--With assistance from Eko Listiyorini.
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