Indonesia probes Musim Mas, Wilmar for ‘under-invoicing’ of exports, finance minister says

Indonesia is investigating two major palm oil companies, Wilmar International Limited and Musim Mas Group, for alleged "under-invoicing" of their exports, according to Finance Minister Purbaya Yudhi Sadewa. The probe is a component of a recently announced government strategy to centralize exports of key commodities like palm oil and coal, aiming to bolster state revenue through enhanced control over sales and pricing.

Wilmar International, a Singapore-based entity, is recognized as one of the world's largest oil palm plantation owners, with a significant portion of its holdings located in Indonesia. Similarly, Musim Mas Group, also headquartered in Singapore, operates as a major integrated palm oil company with primary operations in Indonesia. Neither company immediately responded to requests for comment regarding the investigation.

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Wilmar International and Musim Mas Group are among the palm oil companies now being probed for suspected 'under-invoicing' of exports.

The practice of "under-invoicing" involves declaring exported goods at a value below their actual market price. This is often done to conceal profits and avoid tax obligations. President Prabowo Subianto has identified combating this practice as a key objective of the new export centralization plan, asserting that the undervaluation of commodities has cost Indonesia an estimated $908 billion since 1992.

The announcement of the new export policy has already impacted palm oil prices at the farmer level, leading to a collapse in fresh fruit bunch prices. The government's move signals a determined effort to gain greater financial benefit from its abundant natural resources.

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Selling commodities on the cheap had lost the country US$908 billion since 1992.