KUALA LUMPUR (Sept 28): TSH Resources Bhd (KL:TSH) on Monday clarified that its RM42 million fine in Indonesia involves 1,228.89 hectares of plantations outside the licensed area of its Indonesian subsidiary PT Sarana Prima Multi Niaga (PT SPMN), and does not require it to surrender productive land as feared by analysts.
Analysts who project that the fine could shave more than 20% off TSH Resources’ projected earnings for the current financial year had flagged the surrender of productive land to the Indonesian authorities, and the potential impact on future earnings, as the bigger risk to the company.
While the reason for the fine was still not disclosed, TSH Resources said in a follow-up filing that the hectares were never included in its reported plantation area. As such, the fine will not reduce its reported planted acreage or currently require an impairment of its plantation assets.
Of the total area, 496.69 hectares had been planted before the group acquired the subsidiary, while another 732.20 hectares were planted by local communities.
PT SPMN signed a letter acknowledging the fine on Sept 16 to facilitate negotiations for the instalment plan while awaiting further clarification on the fine and a subsequent appeal.
The RM42 million fine will be recognised in TSH Resources’ financial statements for the third quarter of 2026 and paid in four monthly installments of about RM10.5 million each from September to December.
The group said there would be no other material impact on its financial position or operations.
Separately, TSH Resources said the only remaining matter involving Indonesia’s Forest Area Enforcement Task Force concerns 61.09 hectares planted outside the HGU area of another subsidiary, PT Teguh Swakarsa Sejahtera (PT TSS).
The group said it was not aware of any other outstanding matters involving the task force and would make further disclosures if there were material developments.
As at Dec 31, 2025, the group had a planted area of about 39,000 hectares, comprising 36,000 hectares in Indonesia and 3,000 hectares in Sabah.
TSH Resources first disclosed the fine last Friday, saying its 90%-owned indirect Indonesian subsidiary had been fined 184.35 billion rupiah, or about RM42 million, by Indonesia’s Forest Area Enforcement Task Force. The group did not disclose why the penalty was imposed at the time.
For the second quarter ended June 30, 2026, the group’s net profit rose 6.7% to RM52.51 million from RM49.23 million thanks to better extraction rates, lower costs and stronger joint-venture contributions.
TSH Resources’ shares extended their decline on Monday after the company announced the fine last Friday. At the noon break, the company’s shares were down 5.84%, or eight sen, at RM1.29 a share, valuing the company at RM1.65 billion.