This article first appeared in The Edge Financial Daily on July 11, 2018

KUALA LUMPUR: PPB Group Bhd says it is “business as usual” at its Singapore-listed associate, Wilmar International Ltd — the group’s largest profit contributor — despite recent allegations linking Wilmar to an Indonesian firm involved in deforestation activities.

“Many of these problems have both sides to the story. We are not there, so I think we should not talk about things that we don’t know about,” PPB chairman Tan Sri Oh Siew Nam told reporters after the group’s extraordinary general meeting (EGM) here yesterday.

Last Thursday, two Wilmar senior executives — co-founder Martua Sitorus and Indonesia head Hendri Saksti — resigned days after a Greenpeace report linked the world’s largest palm oil trader to Gama Corp, accused of clearing thousands of hectares in Indonesia’s Papua and West Kalimantan provinces. Gama Corp is owned by Sitorus and his brother Ganda. Saksti is Sitorus’ brother-in-law.

Subsequently, Wilmar came out to say it has no control, management or otherwise, over Gama Corp, and that executives with familial ties at Gama Corp do not hold any decision-making power or influence on its sustainability policy.

PPB owns 18.5% of Wilmar, which accounted for 78% of PPB’s 2017 profit. Wilmar is involved in the entire value chain of the agricultural commodity business, from cultivation, processing and merchandising to manufacturing of agricultural products.

Meanwhile, PPB shareholders approved a bonus issue of up to 237.1 million PPB shares on a one-for-five basis — the group’s first bonus issue since 2005 — at the EGM yesterday.

Also present at the EGM were Datuk Ong Hung Hock, managing director of its flour milling arm FFM Group, and Golden Screen Cinemas (GSC) group chief executive officer Koh Mei Lee.

“I think there is an exodus of illegal workers, so the number of mouths to feed have gone lower,” Ong said about PPB’s flour milling business. He also said FFM will be focusing on upgrading and expanding its operations in Vietnam and has allocated RM100 million to build a factory in Hanoi.

On its film distribution business, the group plans to renovate its flagship cinemas in the Klang Valley — GSC at 1 Utama, The Gardens and IOI Puchong. The group is also on track to open two new cinemas locally, in Johor Baru, Johor, and EkoCheras, Kuala Lumpur, in the first half of 2019, in line with its target to open nine new cinemas over two to three years, said Koh.

Outside Malaysia, the group has identified Phnom Penh for its Cambodian expansion, where a nine-screen cinema costing some US$4 million (RM16.06 million) will be built, said Koh.

All in, the renovation and expansion of the cinemas will cost PPB some RM300 million, Koh added. Excluding Wilmar, film distribution contributes about 20% to the group’s operating profit.

PPB shares closed four sen higher at RM19.72 yesterday, with a market capitalisation of RM23.38 billion. The stock has risen about 16% year-to-date.