Shares of Wilmar International (F34.SI) plummeted 3.11% in early trading on Friday, following news that the Indonesian Supreme Court has overturned the company's previous acquittal in a high-profile graft case. The case involves allegations of corruption related to cooking oil export permits during the 2021-2022 shortage crisis in Indonesia.
The Supreme Court's decision not only affects Wilmar but also overturns the acquittals of two other major Indonesian palm oil companies, Permata Hijau and Musim Mas. The three companies were accused of illegally profiting from the evasion of state-imposed export controls on cooking oil and palm oil during the crisis period.
The reversal of the acquittal poses significant financial risks for Wilmar International. The Indonesian Attorney-General's Office is seeking a substantial compensation of 11.8 trillion rupiah (approximately S$907 million) and an additional fine of one billion rupiah from the Singapore-based global palm oil company. While the details of the judgment and the final award amount have not been released, the potential financial impact has clearly rattled investors.
Wilmar International maintains that the actions taken by its respondents during the cooking oil shortage in the Indonesian market were in compliance with regulations. However, the market's reaction suggests that investors are concerned about the potential repercussions of the court's decision on the company's operations and financial standing in Indonesia, a key market for the palm oil giant.