Wilmar shares tumble 10.5% in early trade amid Indonesia probe

[SINGAPORE] Shares of Wilmar International fell as much as 10.5 per cent in early trading, down S$0.37 at S$3.15 as at 9 am on Thursday (May 28).

By 9.21 am, the counter had recovered to S$3.43, down S$0.09 or 2.6 per cent, after around 4.7 million shares changed hands.

Later at 11.11 am, it was down 4 per cent or S$0.14 at S$3.38, with nearly 10.6 million shares exchanged.

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.

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.

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He said 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.

Singapore-based Musim Mas is also under probe.

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