Wilmar Shareholder Questions Board Independence After $1B+ Legal Losses

A minority shareholder of Wilmar International submitted a strongly worded statement ahead of the company’s April 23 annual general meeting, questioning whether its board has sufficient independence to protect shareholder interests following costly legal troubles in China and Indonesia, according to questions disclosed on the Singapore Exchange on April 17. Wilmar responded by noting it has strengthened board independence through restructuring its risk and sustainability committees to be composed entirely of independent directors since December 2025.

Shareholder Concerns

The minority shareholder’s submission, along with questions from the Securities Investors Association (Singapore) (SIAS), raised concerns about board composition and governance effectiveness. The shareholder described the board as “deeply insular and rigid” and “living in a comfortable bubble,” despite recent committee reshuffles. The shareholder argued that “moving the same faces around does not create true independence” and called for a clearer succession and renewal plan over the next five to 10 years.

The shareholder also noted that despite directors being “among the most highly remunerated,” investors continued to face legal issues, rising debt, and reduced dividends.

Legal Troubles in Indonesia

Indonesia’s Supreme Court in late 2025 overturned a previous acquittal and found five of Wilmar’s subsidiaries guilty of corruption in obtaining palm oil export permits during Indonesia’s cooking oil crisis and domestic palm oil shortage in 2021 and 2022. The court seized 11.8 trillion rupiah (S$874 million) in security deposits. The companies were accused of illegally profiting from evasion of state-imposed export controls on cooking oil and palm oil.

A Wilmar Indonesian executive was sentenced to six years in prison in March for bribing judges in the case. While respecting the court’s decision, Wilmar expressed regret and stressed that its actions were taken in compliance with regulations and in good faith, noting it may seek a judicial review.

Legal Troubles in China

In China, a Wilmar subsidiary, Yihai Kerry Arawana, was found guilty in November 2025 of acting as an accomplice in contract fraud involving fake documents related to palm oil trades between state-owned enterprise Anhui Huawen and privately owned Yunnan Huijia Import & Export. The fraud led to a 5.2 billion yuan (S$970 million) loss for Anhui Huawen.

The Chinese court ordered Yihai Kerry Arawana to jointly bear losses amounting to 1.88 billion yuan, while its former general manager was fined and sentenced to 19 years in prison. Wilmar has filed an appeal maintaining its innocence and arguing it was a victim of the fraud. The fine remains unpaid while the company awaits a final second-instance ruling.

Board Independence Response

In response to shareholder questions, Wilmar said it has strengthened board independence and oversight by restructuring its risk and sustainability committees to comprise entirely independent directors since December 2025. The company noted that none of its independent directors, who form the majority of the board, has served more than nine years.

Wilmar said it has been refreshing its board regularly, appointing at least one new director every two years since 2016, and annually since 2021, to bring in fresh perspectives and avoid groupthink. The company stressed that stability and experience remain key strengths, with directors’ industry expertise seen as critical in navigating complex regulatory and operating environments.

Wilmar said its governance framework includes annual assessments of directors’ independence and structured succession planning, while maintaining a balance between renewal and continuity.

Oversight of Legal Proceedings

SIAS asked how Wilmar’s board oversees significant legal and regulatory proceedings across the group’s global operations and what role independent directors play in supervising investigations and shaping legal strategy. Wilmar said its board and relevant sub-committees are regularly briefed on significant developments, including legal matters, and provide guidance on legal strategy based on investigations conducted by local teams.

Anti-Corruption Measures

SIAS also asked the board to elaborate on how Wilmar enforces its zero-tolerance stance on corruption, including risk assessment procedures and anti-corruption training levels for employees in higher-risk roles. In response, Wilmar said it has policies covering areas such as gifts, lobbying, and facilitation payments, and requires anti-bribery clauses in contracts.

The group said employees undergo training on anti-corruption and fraud, and that whistle-blowing channels are in place for both staff and external parties to report misconduct. Those found in breach face disciplinary action, including dismissal, clawback of bonuses, and possible legal consequences.