KUALA LUMPUR (Dec 30): The Indonesian government has filed a RM293.67 million lawsuit against TDM Bhd’s oil palm unit PT Rafi Kamajaya Abadi (RKA) for allegedly acting illegally in relation to a  fire incident at the subsidiary's land in West Kalimantan province in 2019.

The republic's Ministry of Environment and Forestry is claiming damages for the loss of ecology, loss of economy and compensation costs for the environment impact verification, TDM said in a filing with Bursa Malaysia.

The claim also includes a compensation of RM214.29 million to make good an area of 2,560ha affected by the fire, said the company which is 59.67% owned by the Terengganu state government.

TDM said it is analysing the potential financial and operational impact of the lawsuit.

"As at the date of this announcement, there is no material impact on the operation of RKA and the company’s current financial year.

“However, the company is consulting with its auditor on any potential impairment to be made,” said TDM.

It added that based on the advise of RKA's lawyers, the company is confident that there are grounds for defending and dismissing the claims. The case has been fixed for first hearing on Jan 10.

This is not the first time that Indonesian authorities have taken legal action against palm oil companies for allegedly causing environmental damage in the country.

In August 2014, the Indonesian Supreme Court ruled that Bumitama Agri Ltd, a major palm oil company partly owned by IOI Corp Bhd, had acted illegally in clearing land in Kalimantan for plantations.

The share price of TDM closed at 24 sen on Thursday, valuing the company at RM413 million. Year to date, the counter has fallen 32.4%.