Enforcement officers seized goods worth RM129,869.
Its director, S Jegan, said six men were arrested while transferring subsidised cooking oil from 1kg packets into intermediate bulk containers (IBC).
Authorities also seized 2,300kg of oil in its original packaging, 9,500kg in IBC tanks and 750kg in blue plastic drums.
The raid followed two weeks of intelligence work after public complaints about suspicious activities at the premises.
KPDN had tracked a syndicate-owned lorry transporting subsidised oil from various locations in the state before delivering it to the illegal storage site.
“The owner of the premises failed to produce the necessary licences or permits to store controlled goods.
“Numerous empty plastic packets from the repackaged subsidised cooking oil were also found,” he told a press conference at Bukit Minyak here today.
The syndicate, believed to have been operating for a year, purchased subsidised oil at RM2.50 per kg and sold it to industries for RM4, significantly lower than the market price of RM5.
“The oil supply was sourced from four repackaging companies – three in Penang and one in Kedah. KPDN is investigating whether these companies were directly involved in the operation.
“The syndicate took advantage of Ramadan by transferring the oil into IBC tanks and drums during iftar hours to avoid detection. The illegal storage site was also located far from the main road.
“As soon as the oil arrived at the storage facility, workers immediately cut open the packets and transferred the contents into larger containers to conceal the misappropriation,” he said adding that the owner of the premises had been identified.
The case is being investigated under the Control of Supplies Act 1961 and the Control of Supplies Regulations 1974.
KPDN is also tracking buyers who purchased the misappropriated cooking oil from the syndicate.
Jegan urged the public to continue providing information to help curb misappropriation of controlled goods.
He added that the government supplies 3,084 tonnes of subsidised cooking oil in Penang each month, but such activities made it harder for consumers to access the items.