By Chester Tay

KUALA LUMPUR--IOI Corp. Bhd. said Friday it would reach out to U.S. Customs and Border Protection to address allegations of forced labor.

The Malaysian plantation giant said that it recently became aware of a letter from the U.S. agency to a labor rights activist in which the agency acknowledged receipt of information about alleged labor rights abuses at IOI and said it would investigate.

IOI added that it had not been contacted by CBP regarding an investigation. "Nevertheless, IOI will take the proactive step in contacting CBP to confirm the existence of an investigation and offer our cooperation in providing explanation and documents to assist the investigation," it said.

Shares of IOI were 0.3% lower at MYR3.82 in afternoon trade. The stock has fallen 13% year-to-date, which analysts have attributed partly to worker shortages due to the Covid-19 pandemic, as well as weaker palm oil demand from major importer India due to lockdowns.

IOI's move to contact the CBP comes after the agency last year barred imports from Malaysian palm oil majors FGV Holdings and Sime Darby Plantations due to allegations of forced labor.

Malaysia is one of the world's largest producers of the edible oil. The country's plantations employ hundreds of thousands of migrant workers from around the region.

Write to Chester Tay at chester.tay@wsj.com

(END) Dow Jones Newswires

06-25-21 0325ET