SGX-listed Wilmar International Limited (SG:F34) said this morning that it has “zero tolerance” toward corruption and does not harbour any corrupt practices by employees or any of the units. The statement comes as a unit of Wilmar’s Chinese subsidiary, Yihai Kerry Arawana, was sued for fraud relating to loss-making palm oil trades.
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Wilmar International is an agribusiness company involved in the processing, trading, and distribution of a wide range of products like edible oils, sugar, flour, oilseeds, etc. F34 shares have lost over 17% in the past year.
Allegations Against Wilmar’s Chinese Unit
China-listed Yihai Kerry Arawana’s unit has denied any wrongdoing in the case filed by the city prosecution agency. Yihai Kerry (Guangzhou) Oils & Grains Industries Co. Ltd was sued for undertaking fraudulent palm oil trades between a state-owned trader and a private counterparty.
The private feed trader, Yunnan Huijia Import & Export Co., is said to have used forged documents to buy palm oil from state-owned company Anhui Whywin International Co. without making full payments. The prosecution notes that Yihai Kerry was an accomplice in the dubious trades.
The alleged fraud led to a loss of 5.2 billion yuan for the state-owned company. Wilmar’s Chinese unit stated that it will continue to fight the charges to protect the company’s and shareholders’ interests.
Is Wilmar International a Buy or Sell?
On TipRanks, F34 stock has a Moderate Buy consensus rating based on two Buys versus two Hold ratings. The Wilmar International Limited share price target of S$3.94 implies 14.4% upside potential from current levels.
