(May 26): Indonesia is probing some of the world’s biggest palm-oil companies for suspected export abuses, adding to the upheaval in the industry days after the government announced a plan to nationalise shipments of the crop.
Wilmar International Ltd and Musim Mas Group are among 10 palm producers being probed for suspected under-invoicing and transfer pricing of exports, which are key concerns of President Prabowo Subianto, Finance Minister Purbaya Yudhi Sadewa told reporters in Jakarta on Tuesday. Under-invoicing is a practice in which the full value of exports isn’t declared, allowing profits to be shifted to lower tax jurisdictions.
The issues were among the reasons the president gave last week when announcing that the government would take control of the country’s key commodities exports. The sudden and sweeping plan marks the Prabowo’s administration latest move against perceived abuses in Indonesia’s vast natural resources industry, with the government also seizing millions of hectares of plantations and mines for improper land management.
Wilmar and Musim Mas did not immediately reply to requests for comment.
On Monday, the attorney general’s office said it was investigating the alleged manipulation of crude palm oil export prices by 10 major producers in Indonesia. Prosecutors are working with the finance ministry on the case, said director of investigations Syarief Sulaeman Nahdi.
The fresh probe adds to Wilmar’s challenges in Indonesia, the world’s largest palm oil grower. The company last year had to relinquish an 11.9 trillion rupiah deposit — valued at the time at US$729 million ($931.67 billion) — to the Indonesian AGO as part of a separate probe related to palm oil exports.
See also: Palm oil titan Wilmar dives most in six years on Indonesia probe
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