Wilmar, Musim Mas among palm-oil firms in Indonesia under probe for suspected export under-invoicing

[JAKARTA] Indonesia is investigating several exporters of crude palm oil (CPO) for suspected under-invoicing and transfer-pricing practices, in a move that underscores Jakarta’s broader effort to tighten control over strategic commodity flows.

Local media reports quoted Finance Minister Purbaya Yudhi Sadewa as saying on Tuesday (May 26) that the authorities’ monitoring system had flagged 10 exporters as having allegedly engaged in those practices.

Among the companies under investigation are Singapore-based Wilmar International and Musim Mas.

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

Purbaya said that the companies shipped or sold CPO to trading firms in Singapore, which then resold the cargo to the United States after price markups of as much as 50 per cent, raising concerns that a portion of export value may have been moved offshore.

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.

“The records here are correct, but the ones there are not. So their reported export data is lower than it should be, roughly 50 per cent below the actual figure,” he said, adding that the issue appears consistent with transfer-pricing practices rather than administrative errors.

The Business Times has reached out to the Wilmar group and Musim Mas for comment.

The probe comes as Indonesia moves to centralise oversight of key commodities including coal, CPO and ferroalloys through a state-entity export body, with the aim of curbing under-reporting, tax leakage and offshore profit shifting.

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In a speech on May 20, President Prabowo Subianto said Indonesia has lost as much as US$908 billion in the last three decades through under-invoicing practices in commodity trade.

The probe adds fresh pressure on major palm oil players, including Wilmar International and the Musim Mas Group, both of which were already under legal scrutiny in 2025 in a corruption case linked to cooking oil export permits.

That case resulted in penalties exceeding 11 trillion rupiah (nearly S$800 million) for Wilmar. It was one of the largest enforcement actions in Indonesia’s commodity sector in recent years.