Wilmar’s Indonesian subsidiary charged

PETALING JAYA: The Indonesian subsidiary of PPB Group Bhd’s 18.8%-owned associate, Wilmar International Ltd, has been charged by the Indonesian Public Prosecutor for carrying out unlawful acts relating to the import of raw sugar, which allegedly caused losses amounting to 578 billion rupiah (approximately US$36mil) to Indonesia.

In a filing with Bursa Malaysia through PPB, Wilmar said the company’s Indonesian subsidiary, PT Duta Sugar International (DSI), along with representatives of eight other refined sugar producers in Indonesia, has been charged for the aforementioned offence.

Together, these nine sugar producers account for the majority of the refineries processing imported raw sugar into refined sugar in Indonesia.

The nine sugar producers were required to place a security deposit totalling 565.34 billion rupiah (approximately US$35mil) with the Indonesia Attorney General (AG).

DSI’s share of this deposit was 41.23 billion rupiah (approximately US$2.5mil).

Wilmar said the financial impact of the US$2.5mil deposit paid by DSI, if forfeited, will not be material to it.

The position of the nine sugar producers in relation to these charges has always been that they were acting in accordance with a directive by the then-trade minister Thomas Trikasih Lembong to partner with the state-owned trading company, PT Perusahaan Perdagangan Indonesia, in importing raw sugar and distributing refined white sugar for the purpose of addressing the domestic sugar shortage problem in Indonesia in 2016.

The said former trade minister was arrested in October 2024 and subsequently charged by the AG for violating the relevant trade regulation. In approving the issue of import permits to the nine sugar producers, the AG claimed that the former minister had helped to enrich the nine sugar producers and that his actions had allegedly caused 578 billion rupiah in state losses (of which 7.8% or 45 billion rupiah was DSI’s alleged share) as the profit made by the nine sugar producers should have gone to the state-owned company.

On July 18, 2025, despite the former minister challenging the charges on the basis that they disregarded his ministerial authority to regulate the trade of essential goods, he was found guilty and sentenced to four years and six months’ imprisonment and fined 750 million rupiah, with a subsidiary penalty of six months’ imprisonment if the fine was not paid.

However, the legal process against the former trade minister was subsequently halted following the Presidential Decree granting him abolition.

Representatives of the nine sugar producers, including the general manager of DSI, have been detained and charged for the aforementioned acts.

The representatives of the nine sugar producers have contended that following the abolition and halting of legal processes in respect of the sugar import case against the former trade minister, the case against the representatives of the nine sugar producers who acted in accordance with the minister’s direction should be dismissed.

Wilmar said the case against the nine sugar producers is now pending the court’s decision, and a further announcement will be made once the court’s decision is known.