KUALA LUMPUR (Nov 3): Indonesia's highest court has dismissed the appeal by TDM Bhd’s subsidiary against the republic's Ministry of Environment and Forestry in relation to a fire incident in 2019 at its land in West Kalimantan province.

The plantation group told Bursa Malaysia on Friday that the Indonesian Supreme Court has upheld the decision by the Pontianak High Court, which ordered the subsidiary — PT Rafi Kamajaya Abadi (PTRKA) — to pay compensation of 188.98 billion rupiah (RM56.68 million) for environmental loss.

PTRKA also will have to fork out 731.04 billion rupiah (RM219.25 million) to rehabilitate the environment in the affected area of 2,560 hectares and to reactivate the affected ecology system.

In total, the Terengganu state-controlled group is required to pay RM275.93 million, a figure that nearly matches its entire market capitalization of RM293 million.

“The company is assessing its financial impact to the group and further announcements will be made accordingly,” TDM said in the bourse filing, adding: “We have been informed by PTRKA that its legal counsel is diligently assessing new evidence and is prepared to file a judicial review against the above decision."

On the proposed disposal of PTRKA, TDM said the process is ongoing and the parties are committed to complete the disposal.    

TDM had in June 2022 announced its plan to dispose of its entire stake in two Indonesian plantation firms for a total of RM115 million, a move aimed at exiting Indonesia and focusing its resources on its Malaysian operations.

One of the firms, PTRKA, has been loss making since its incorporation up till Dec 31, 2020 while the other, PT Sawit Rezki Abadi, has also been reporting losses since its incorporation.

In a separate local bourse filing on Friday, TDM said the Indonesian Supreme Court also upheld the decision made by Pontianak High Court in relation to the fire incident case filed by the Sintang regency public prosecutor against PTRKA. The apex court upheld the decision that PTRKA is responsible and liable to a fine of 2.5 billion rupiah (RM749,794).

Shares in TDM closed half a sen or 2.86% lower at 17 sen.