Wilmar says it has not received official notice of Indonesia probe into suspected export under-invoicing

[SINGAPORE] Wilmar International said in a bourse filing on Thursday (May 28) that it has not received official notification of being under investigation by the Indonesian authorities for suspected under-invoicing and transfer-pricing of exports.

The agribusiness giant added that it is “working with the relevant authorities to understand their concerns”.

“If and when we receive official notification... we will update the market accordingly,” said the company.

The Business Times reported on Tuesday that the company is among 10 crude palm oil (CPO) exporters under investigation for suspected under-invoicing and transfer-pricing practices.

Singapore-based Musim Mas is also under probe.

Under-invoicing is the practice of declaring a lower export value in order to shift profits to lower-tax jurisdictions and/or pay lower export taxes.

Indonesia’s Finance Minister Purbaya Yudhi Sadewa said that the companies shipped or sold CPO to trading firms in Singapore, which then resold the cargo to the US after price mark-ups of as much as 50 per cent, raising concerns that a portion of export value may have been moved offshore.

He noted that while domestic export documents in Indonesia appeared accurate, inconsistencies emerged in transit records and destination pricing, suggesting the use of offshore trading hubs to book higher margins outside the country.

The investigation is part of Jakarta’s broader effort to tighten control over strategic commodity flows.

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Wilmar declined as much as 10.5 per cent or S$0.37 to S$3.15 in early trading on Thursday.

As at the midday trading break, its shares were down S$0.140 or 4 per cent at S$3.38.