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Wilmar has been ordered to relinquish a 11.9 trillion rupiah deposit – then worth around $928 million -to the state as compensation.
– Shares of Wilmar International tumbled to the lowest level in nine years after an Indonesian court quashed an acquittal against the group and ordered the company to relinquish a multimillion-dollar security deposit.
The Asian food titan slumped as much as 3.8 per cent in Singapore to the lowest level since February 2016 on an intra-day basis, before clawing back some losses after it announced the Supreme Court decision in a filing after markets closed on Sept 25.
The stock closed flat at $2.85 on Sept 29, but still down 1.4 per cent since news of the “guilty” ruling.
The ruling was against three separate palm oil companies, including Indonesia’s Permata Hijau Group and Musim Mas Group. Charges against Wilmar stemmed from actions taken by five of its subsidiaries between July and December 2021 during a cooking oil shortage. A court panel in March favoured Wilmar, but the Attorney-General’s Office challenged the verdict, with some judges detained for alleged bribery.
Wilmar was ordered to relinquish the deposit to the state as compensation, according to information on the court’s website.
The company had to issue the 11.9 trillion rupiah deposit – then worth around $928 million and equivalent to nearly two-thirds of net income in 2024 – months before the ruling.
In a separate filing late on Sept 26, Wilmar said it expects to report a net loss for the third quarter ending September as a result of the ruling, while staying profitable for the 2025 fiscal year. It said it may apply for judicial review of the Supreme Court’s decision.
In the filing a day earlier, Wilmar said it respected the court’s decision, but maintained that the actions taken at the time “were done in compliance with prevailing regulations and in good faith”.
It added that the decision was made against Wilmar, Permata Hijau Group and Musim Mas Group.
Permata Hijau and Musim Mas did not immediately respond to a request for comment on the ruling.
The Supreme Court ordered Wilmar Nabati Indonesia – one of the five subsidiaries charged in the case – to pay a one billion rupiah (S$77,000) fine, according to information on the court’s website.
RHB Research downgraded its rating on Wilmar shares to “sell” and lowered its price target to $2.50 on expectations that the forfeiture of the deposit would reduce its forecast on Wilmar’s 2025 earnings by 65 per cent. BLOOMBERG
[SRC] https://www.straitstimes.com/business/companies-markets/wilmar-shares-fall-to-lowest-since-2016-after-indonesian-court-imposes-fines