Wilmar subsidiary found guilty of contract fraud in China as group prepares appeal

A Chinese court has found Guangzhou Yihai guilty of contract fraud and ordered it to jointly bear losses of about 1.88 billion yuan.

According to the judgement by the Intermediate People’s Court of Huaibei City, the ruling was delivered on 19 November 2025.

The case concerns alleged fraudulent palm oil transactions between state-owned enterprise Anhui Huawen and privately owned Yunnan Huijia Import & Export Co.

The alleged scheme resulted in losses of 5.2 billion yuan for Anhui Huawen, according to the court documents.

Prosecutors had sued Guangzhou Yihai (益海（广州）粮油工业) in January 2024 as an alleged “accomplice” in the fraud.

The unit is a subsidiary of Yihai Kerry Arawana (益海嘉里金龙鱼食品), which is nearly 90 per cent owned by Wilmar International.

The court imposed a one million yuan fine on Guangzhou Yihai.

It also ruled that the subsidiary must share liability for the roughly 1.9 billion yuan in losses incurred by Anhui Huawen, alongside Yunnan Huijia.

A former general manager of Guangzhou Yihai, Liu Degang, received a 19-year prison sentence.

He was convicted of contract fraud and bribery by a non-state employee, and the court ordered the confiscation of his illicit gains.

The judgement stated that Guangzhou Yihai had assisted Yunnan Huijia and individuals associated with it in committing fraud against Anhui Huawen.

However, Wilmar strongly disputed this conclusion in a bourse filing.

Yihai Kerry Arawana said it would “fully support” an appeal by the subsidiary.

According to the company, the court’s factual findings, reliance on evidence and application of the law were erroneous.

The company stated that the fraud had been orchestrated by Yunnan Huijia, which allegedly bribed Anhui Huawen staff to fabricate transactions.

Wilmar argued that Yunnan Huijia was attempting to shift responsibility by implicating Guangzhou Yihai.

“Guangzhou Yihai neither participated in nor had knowledge of any fraudulent activities, nor did it engage in any acts of assistance,” YKA said in its statement.

The firm added that seven criminal law experts it had consulted previously concluded that the subsidiary’s actions did not constitute a crime.

Wilmar noted that the judgement remains non-final pending appeal.

The fine is therefore not payable, and the ultimate liability remains undetermined while proceedings continue.

YKA emphasised that its operations continue as normal despite the legal challenge.

The agribusiness group is one of the largest integrated players in Asia, with major interests across palm oil, sugar and other commodities.

In a separate development last month, another Wilmar subsidiary in Indonesia came under scrutiny.

A general manager of PT Duta Sugar International was indicted over an alleged illegal sugar import scheme dating back to 2016.

Indonesian authorities said the scheme caused state losses of about IDR 578 billion, estimated at around US$36 million.

The case is linked to a broader scandal involving former Trade Minister Thomas Trikasih Lembong, who was convicted in July 2025.

The indictment adds to the company’s growing list of legal challenges in Indonesia.

The developments place Wilmar under intensified regulatory and judicial attention across the region.