According to reports by The Jakarta Post & Jakarta Globe, Wilmar is being investigated for tax fraud involving Rp3.6tr (US$385m). The tax authorities alleged that the palm oil giant conducted fictional transactions, fabricated financial reports and arranged bogus transfer pricing to receive tax refunds from the Indon govt.
As expected, Wilmar has categorically denied the allegations that it made VAT restitution claims that were questionable and fictitious and denied any collusion with tax officials. If the claims were substantiated, there would be material impact on Wilmar’s earnings as the total restitution of US$385m for 2007-2009 accounts for 21% of its net profit. Under Indon tax law, the Tax Directorate can impose a penalty of up to 4x the outstanding amount. yeosayann :
We expect a knee-jerk reaction to Wilmar’s share price today, which might also put a cloud on the other Indon palm oil players as well. Until this scandal clears, CL has downgraded to the stock to Underperform and cut its TP to from $6.88 to $5.70, which is also its technical support.
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