PETALING JAYA: PPB Group Bhd
’s 18.8%-owned associate, Wilmar International Ltd, has announced that its indirect 89.99%-owned subsidiary, Yihai Kerry Arawana Holdings Co Ltd, will be appealing a Chinese court ruling involving its subsidiary, Guangzhou Yihai Oils & Grains Industries Co Ltd.
In a filing with Bursa Malaysia, PPB, on behalf of Wilmar, said Guangzhou Yihai was fined 1 million yuan (RM586,066) after being found guilty of contractual fraud by the Intermediate People’s Court of Huaibei City, China.
It was also ordered, together with Yunnan Huijia Import & Export Co Ltd, to jointly cover 1.88 billion yuan in losses incurred by the state-owned Anhui Huawen International Trade Co Ltd.
“In connection with the above case, a former general manager of Guangzhou Yihai, who was alleged to have been bribed to provide assistance to Yunnan Huijia to commit fraud against Anhui Huawen, was found guilty of contract fraud and bribery by a non-state employee.
“He was sentenced to a total of 19 years imprisonment and a fine of 2.8 million yuan and his illicit gains were ordered to be confiscated in accordance with the law and remitted to the state treasury.”
Wilmar said the abovementioned conviction of Guangzhou Yihai is based on an allegation that Guangzhou Yihai had assisted Yunnan Huijia and certain persons behind Yunnan Huijia, in committing fraud against Anhui Huawen.
“Guangzhou Yihai’s position has always been that Yunnan Huijia, having bribed executives and employees of Anhui Huawen, fabricated transactions which resulted in losses to Anhui Huawen, and is now attempting to implicate Guangzhou Yihai and shift responsibility for such losses to Guangzhou Yihai.
“Guangzhou Yihai intends to appeal against the judgement as it is of the view that the first-instance judicial proceedings, factual determinations, adoption of evidence, and application of law were erroneous.”
As the case will be appealed, Wilmar said the judgement does not take effect yet.
“Hence, the fine imposed on Guangzhou Yihai is not required to be paid pending the outcome of the appeal.
“Since the case will be appealed and the ultimate liability of Guangzhou Yihai for Anhui Huawen’s losses remains undetermined, the financial impact of the judgement on the Wilmar group and the company is uncertain.”
