First Resources palm plantations safe from seizure

14 March 2008 02:32  [Source: ICIS news]

SINGAPORE (ICIS news)--Indonesian crude palm oil (CPO) producer First Resources said on Friday the government has withdrawn its intention to seize its plantations to pay a fine imposed on one of its founders and former shareholders.

In what is a major reprieve for the company, it said the Indonesian Corruption Eradication Commission (KPK) had announced in a press conference that the fine of $38.3m (€24.5m) imposed on Martias had been fully paid.

The company added that it had played no part "through financial assistance to Martias or any party in relation to the payment of this financial penalty".

"As such, the KPK will withdraw its intention to auction off 19 properties that the KPK deemed to be belonging to or related to Martias," it said.

Three of the assets to have been included in the auction were – PT Ciliandra Perkasa, PT Pancasurya Agrindo, and PT Perdana Intisawit Perkasa – plantation and milling subsidiaries of the company.

The company had said it would challenge in court any action by the KPK to seize its assets to secure payment for the penalty imposed on Martias, who was convicted of corruption in May last year for illegally granting rights to 11 companies to set up private plantations in reserved forest areas in East Kalimantan, including Bumi Sawit Perkasa, a subsidiary of the company.

First Resources is one of Indonesia’s largest private sector producers and processors of CPO and palm kernel.

First Resources’ shares rebounded slightly on Friday to Singapore dollar (S$) 1.08 from S$1.01.

($1=€0.64)

($1=S$1.38)

By: Arujnee J Ram
+65 6780 4359

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