Asian Agri allegedly makes Indonesia losses IDR1.29 trillion

An experts at Financial and Development Supervisory Agency revealed the governmnet has been harmed at least IDR1.29 trillion of loss by PT Asian Agri, due to unpaid taxes.
Head of Investigation at Financial and Development Supervisory Board (BPKP) Jakarta region Arman Sahri disclosed the potential loss in the court, while representing the prosecutor to review the tax fraud lawsuit against Suwir Laut, former Manager of Asian Agri at the Central Jakarta District Court yesterday.
The loss, as he continued, is concluded from comparing the audited Asian Agri Group's Annual Tax Letter, submitted to Tax Office Tanah Abang I and II, with the general book and audit by public accounting firm upon the company's financial report.
The investigation was carried only to 10 units, out of 14 units of the suspected business entities. "There are four other units that we can not submit yet to the panel of judges," he said.
The modus Asia Agri had used to avoid the tax obligation, as he explained, is to sell products to its overseas affiliated companies in very low prices. "Another modus is paying several consultant services which then included as expenses, but in fact they never exist."
The company also sold their products with a very low price, while the cost of goods sold was heavily marked up from the exact value.
The alleged tax fraud was uncovered after the former financial controller of the group named Vincentius Amin Sutanto disclosed it to the Corruption and Eradication Commission in late 2006.
The case was taken over by the investigator from Directorate General of Taxation in January 2007. At the end of the investigation, tax investigators suspected the tax case fraud has made the government loss IDR1.4 trillion of tax income.
Vincentius had been sentenced to prison for 11 years, after his judicial review was rejected by the Supreme Court.

Goverment offer 1.75% shares Newmont to local

The government has softened its stance in the Newmont Mining saga by offering a combined quarter of a 7 percent stake in Newmont Nusa Tenggara to the local administrations in the region where the firm’s lucrative copper and gold mine is located.

Much of the NNT’s divestment debate centered on the regional and local administrations vying for the stake, which is valued at $246.8 million.

The West Sumbawa district administration welcomed the government’s plan, while the West Nusa Tenggara provincial administration was yet to announce its view on the offer of the 1.75 percent stake — equivalent to $61.7 million — in NNT, which is a local unit of Colorado-based Newmont Mining.

The central government will finish the 7 percent stake purchase, and then offer a quarter each to the regional governments.

The Finance Minister Agus Martowardojo said the regional administrations could pay the central government for their 1.75 percent stakes in installments via dividend payments from NNT. However, Agus said the regional governments had to be the sole purchaser of the stakes, leaving no room for private companies to be involved.

Pukuafu has claimed that it was given the rights to 31 percent of NNT’s divestment share, but NNT says that it never made such a deal. NNT has called for a speedy resolution to the disputes, saying that the longer it takes for the government to get its hands on the shares, the longer dividends will not be paid. Under Newmont’s 1986 working contract with the government, NNT is required to divest 51 percent of its shares to Indonesian entities by 2010. Domestic companies now hold 44 percent of the miner’s local unit.

Indonesia Goverment may seize Temasek assets

Komisi Pengawas Persaingan Usaha (KPPU), Indonesia' s anti-monopoly agency is evaluating Temasek Holdings Pte's assets in the country and said the government has the right to seize them if a court-imposed fine isn't paid.

The Singapore state-owned investment company lost its final appeal in the Supreme Court on May 24 for violating antitrust laws.

A fine of IDR150 billion which includes IDR15 billion for each of 10 Temasek-linked companies involved in the case, was set, the KPPU said.

KPPU was said Temasek breached antitrust laws by using indirect stakes in PT Telekomunikasi Selular, known as Telkomsel, and PT Indosat, the country's top two mobile-phone service providers, to fix prices.

Temasek's Singapore Technologies Telemedia Pte unit sold its stake in Indosat, Indonesia's second largest mobile-phone services provider, to Qatar Telecom QSC in June 2008 after an
earlier district court ruling. A unit of Singapore Telecommunications Ltd., Southeast Asia's biggest phone operator and majority owned by Temasek, has a 35 percent stake in Telkomsel.

High tension Indonesia and Malaysia

Tensions between Malaysia and Indonesia are heating up again following the arrest of three Indonesian maritime officers by Malaysian Marine Operations Force.

The three officers were in Bintan waters off Riau Islands when they were arrested on Friday night by the Malaysian Marine Operations Force.

The three had been part of a five-strong patrol team when they encountered the ILLEGAL fishermen. Two officers took seven of the fishermen to Sekupang, Batam, while three boarded the fishing boats, where they were arrested.

President Susilo Bambang Yudhoyono said the matter must be resolved diplomatically to avoid straining relations.

Indonesia is highly sensitive about its territorial integrity since losing the tiny islands of Sipadan and Ligitan off the northeastern coast of Borneo — disputed since 1969 — to Malaysia following a 2002 ruling by the International Court of Justice.

Tutut versus Hary Tanoe

Siti Hardiyanti Rukmana (Mbak Tutut), the once-powerful eldest daughter of the late President Suharto, claimed through a lawyer for the 75% ownership in PT Cipta Televisi Pendidikan Indonesia.

In the letter dated June 8, 2010, the Ministry of Justice and Human Rights Affair through a Minister of Justice Decree revoked the ownership act of PT Berkah over TPI dated March 21, 2005. Based on the letter, Tutut held a Shareholders General Meeting (RUPS) and named new directors.
Japto Soerjosoemarno is named the president director, who is accompanied with several other directors. The seven-member board of directors later came to the TPI office at the MNC Tower to notify the latest status.

Bambang Hary Iswanto Tanoesoedibjo, President Director of PT Media Nusantara Citra Tbk, strongly rejects Mbak Tutut's claim over the ownership of a 75% stake in TPI. According to Hary, the company would maintain its ownership in TPI despite the fact Tutut had got a letter canceling the share ownership of PT Berkah Karya Bersama-a subsidiary of MNC-in TPI.

Bakrie win

Indonesia's Supreme Court rejected agovernment appeal against a lower court ruling that denied
preliminary evidence in a tax investigation of PT Kaltim Prima Coal, or KPC, a unit of coal producer PT Bumi Resources Tbk.
Indonesia's tax office filed an appeal to the Supreme Court on March 29, asking the country's highest legal body to dismiss a December 2009 ruling by the Jakarta-based tax court that
faulted the steps taken in getting the preliminary evidence related to suspicions that KPC underreported its tax obligations.

A panel of three judges turned down that appeal on May 24, the Supreme Court said in a statement on its website.

Bumi is owned by the family of Aburizal Bakrie, Indonesia's fourth richest man, according to Forbes. Bakrie is chairman of Golkar, the country's second-largest political party, which is a
member of President Susilo Bambang Yudhoyono's ruling coalition.

Abengoa suspend purchase from Sinar Mas

Abengoa SA, a Spanish energy company, said it won’t buy palm oil from Sinar Mas Group until theIndonesian producer complies with its sustainability policies.

Abengoa joins Nestle SA, the world’s biggest food maker,and Unilever NV in ruling out purchases from Sinar Mas,Indonesia’s biggest palm oil producer.

That follows an April 2008 report by the environmental group Greenpeace that said Sinar Mas destroyed rainforest, causing global-warming emissionsand hurting the habitat of the endangered orangutan.

Indonesia is the largest palm oil producer. Abengoa’sbiofuels unit asked its raw materials providers to exclude palmoil from any unit of the Sinar Mas group, the company said.

The Indonesian company’s unit, known as SMART, said April 1 that it’s appointed two bodies, Control Union Certification and the BSI Group, to investigate the Greenpeace claims. The reviewis scheduled to take three months from its April 20 start date.

The Indonesia Palm Oil Association has called the decisionsby Nestle and Unilever to halt purchases unfair. Cargill Inc.,the largest U.S. agricultural company, has also said it may stopdoing business with the company if the claims are correct and ittakes no action.

Century battle

Indonesian Finance Minister SriMulyani Indrawati defended the government's bailout last year of PT Bank Century, and said she supports a parliamentary inquiry into the rescue.
If Bank Century had been allowed to fail, others would have followed, Sri Mulyani said today at a press briefing in Jakarta.

The closing of Bank Century could have had a domino effect on 23 other banks in crisis conditions that time, she said.

Indonesia's Supreme Audit Agency (BPK) yesterday issued a report that said some of the government's liquidity injections to Bank Century had no legal basis, and unhealthy practices were exercised in handling the bailout. Lawmakers have called for a formal inquiry into the rescue.
The government initially injected IDR1 trillion to boost liquidity at Bank Century after Indonesia's Deposit Insurance Corp. seized it Nov. 21 last year, eight days after the lender failed to meet a IDR5 billion obligation on time. The bank has since received IDR6.7 trillion in funds,
prompting lawmakers to demand an inquiry into the bailout.
Sri Mulyani and Vice President Boediono, who was central bank governor at the time of the disbursement, form the core of Yudhoyono' s economic team.

Bank Indonesia said in a response to the audit that the bailout was part of the central bank's efforts to save the financial, banking and economic system in Indonesia amid the peak of the global economic crisis. Bank Indonesia deeply regrets that the audit didn't paint the whole picture of the real facts and problems, it said on its Web site yesterday.

Century battle

Vice President Boediono said that as a citizen he was ready to be investigated over the Bank Century bailout case.

"The vice president is also a citizen. As a citizen, I am ready to be questioned," the vice president told a press conference after Friday prayers at his office.

He said the government’s decision to bail out the ailing bank at the time was an effort to overcome an emergency situation. At the time, he said, there was an extraordinary problem, including a liquidity problem.

Boediono said, if any criminal act had been committed in the bail-out process, it should be investigated, no matter who was involved.

Supreme Audit Agency (BPK) continues to study and collect additional data required for investigation audit process to rescue PT Bank Century Tbk, the then so-called Bank Mutiara, which is targeted to finalize by end of the year.

Based on the instrument prepared in the Government Regulation in lieu of Law (Perppu) of Finance System Security Networks (JPSK), the Finance System Stability Committee (KKSK) chaired by Finance Minister Sri Mulyani and approved by BI governor at the time, Boediono, has considered Bank Century as default bank and surrendered it to the Deposit Insurance Corporation (LPS) November 21, 2008.
With the potential reason to drive systemic effect, Bank Century was taken over by the government from November 2008 up to July 2009 with IDR6.72 trillion bailout fund.
The fantastic bailout fund then drew serious concern of the Legislatives. Let alone, the fund was disbursed twice February 3, 2009 worth IDR1.155 trillion and July 21, 2009 worth IDR630 billion following the disapproval given by the Parliament of Perppu JPSK December 18, 2008.

Indonesian Police Lacked Evidence in Graft Case

Indonesian police didn 't have enoughevidence to name two officers of the government' s anti-graft agency as suspects in an abuse-of-power case, a panel formed by President Susilo Bambang Yudhoyono said late yesterday.

The case against Bibit Rianto and Chandra Hamzah, deputy chairmen of the Corruption Eradication Commission, known as KPK, will be weak if it is forced to go to court with charges
of abuse of power, said Adnan Buyung Nasution, who heads the panel set up last week amid a public outcry over the arrests.

Anti-graft groups have accused the police of manufacturing a case against Hamzah and Rianto to hamper the agency's efforts to pursue corruption cases. KPK has convicted politicians and
policemen since it was founded in 2003.

Yudhoyono said last week the top priority in his second term, which started Oct. 20, will be rooting out the judiciary mafia responsible for bribery of state officers to secure favorable court judgments.

Police arrested Hamzah and Rianto Oct. 29 for allegedly abusing their powers when issuing travel bans against graft suspects. The arrests sparked a public outcry that saw students
go on hunger strikes and spawned a campaign on the social- networking Web site Facebook supporting the anti-graft officials.

Yudhoyono appointed the inquiry panel, which will give its final recommendations next week, after saying he wouldn't interfere in the legal process. The panel has no legal authority
to force the attorney general or police to drop the case.

Indonesian Police Chief Bambang Hendarso Danuri said last week his force intends to prosecute Hamzah and Rianto because investigators found “money trails linking them to a businessman whose brother was put on the KPK's travel ban list.

Although money trails were discovered from the tycoon to a middleman, the evidence stopped there, said Nasution from the inquiry team. There's no evidence presented to us on the subsequent money flow. It now depends on the attorney general, whether the case is brought to court, he said.
The police chief and attorney general report to Yudhoyono, who was re-elected in the July 8 election partly because of his anti-corruption achievements and promises.
Prosecutors have returned the files on Hamzah and Rianto to police because more evidence and better witness testimony is needed, the attorney general's office said on its Web site.
Under Indonesian law, police have 14 days to refile the case with prosecutors, who will then decide whether to proceed.

Task team for KPK case

The Government announced the formation of a team to work on the legal controversy of the Corruption Eradication Commission.
Member of the Presidential Advisory Council Adnan Buyung Nasution was the co-leader of the team with (Ret) Police General Kusparmono Irsan a former member of the National Human Rights Commission.
Special presidential staff Denny Indrayana was appointed as the secretary of the team, while Todung Mulya Lubis (Transparency International Indonesia), Hikmahanto Juwono (University of Indonesia), Anies Baswedan (Paramadina University), Amir Syamsuddin (private lawyer), and Komaruddin Hidayat (Syarif Hidayatullah State Islamic University) as the members of the team.

KPK VS Police

More than 300,000 people in Indonesia have joined a protest on networking site Facebook against last week's arrest of two anti-graft body officers, and students plan street rallies for the same cause today.

Police arrested Corruption Eradication Commission deputies Chandra Hamzah and Bibit Rianto on allegations they abused their power when they issued travel bans against targets
of corruption investigations.

Anti-graft groups and religious leaders have accused the national police of using the case to weaken the KPK, as the agency is known.

The online protest was created by Usman Yasin, a lecturer at Muhammadiyah University in
Bengkulu on Sumatra Island.

The case against the KPK officers and increasing public comment have put pressure on Yudhoyono, who started his second term on Oct. 20 pledging to end corruption in state agencies to attract more investment.

Indonesia ranks 126th in Transparency International's corruption-perception index for 2008, up from 143 a year earlier but lower than Nigeria and Vietnam.

In an Oct. 30 televised address, Yudhoyono said if he interferes with the case, the justice system will be ripped apart, adding he let police and prosecutors build the case.

Police Response Two hours after the president' s speech, Danuri held a press briefing in which he denied the investigation was manufactured.

Police named Hamzah and Rianto as suspects in September after receiving tips from KPK chief Antasari Azhar, who is now on trial for allegedly orchestrating a murder, that there were
irregularities in how the agency issues travel bans. Yudhoyono suspended Hamzah and Rianto on Sept. 21. They remained free as long as they reported their whereabouts to police.
The Oct. 29 arrest was prompted by media briefings at the KPK office, sometimes televised live, defending the suspects and criticizing how police handled the case.

KPK and its partner, the Corruption Crimes Court, were formed less than six years ago as an alternative to pursuing cases through Indonesia's regular justice system.

Titik Soeharto & Rizal Malarangeng, a new Golkar leader

Aburizal Bakrie, a New Chairman Golkar, picks Titik Soeharto daughter former president Soeharto and Rizal Malarangeng spoke person Susilo Bambang Yudhoyono and Boediono become a new board of the party.
There are three governors who participate in the board of Golkar. Aburizal are namely Riau Governor Rusli Zaenal became Head of Executive Relations and the Judiciary, Banten Governor Ratu Atut Chosiyah became Head of Women, and Gorontalo Governor Fadel Muhammad became Head of Student Affairs and NGOs.

Bakrie get Golkar

Aburizal Bakrie, Indonesia's People's Welfare Minister and an ally of President Susilo Bambang
Yudhoyono, was elected chairman of Golkar, the nation's second-largest party, and vowed to back the government coalition. Bakrie was named chairman following a two-day convention in Pekan Baru Sumatera.
Main contender Surya Paloh, owner of Indonesia's first news channel Metro TV, had pledged to oppose the government had he won. Bakrie received 296 out of 536 votes, with Paloh taking the remainder.
Yudhoyono won a second five-year term in July. His Democrat party took 148 of the 560 seats in parliament in April elections, almost tripling its earlier tally. Golkar won 108 seats.
Hutomo Mandala Putra, the son of former Indonesian President Suharto who was convicted of ordering the 2001 murder of a judge, received no votes. Golkar was the political vehicle of Suharto.

Tumpak Hatorangan, new Chief KPK

Commisioner of Corruption Eradication Comission, known as KPK, choose Tumpak Hatorangan Panggabean as a new chief. Indonesian President filled three leading posts at the country' s anti-graft body that were vacated due to criminal probes with former commissioners and a United Nations adviser.
The new leader of Corruption Eradication Commission, known as KPK, are Mas
Achmad Santosa, a lawyer who advised the UN in Indonesia on legal reforms. The
other replacements are Tumpak Panggabean and Waluyo, both KPK deputies from 2004 until 2007. Waluyo, who goes by one name, was formerly a director at national oil company PT Pertamina, while Panggabean was a commissioner at PT Pos Indonesia, the state postal service.
Others commisioners are Jasin dan Haryono Umar.
President suspended KPK chief Antasari Azhar in May after police named him a suspect in a murder case.

SBY names panel to recommend replacements for graft body

Indonesian President Susilo BambangYudhoyono formed a panel to recommend replacements for three leaders of the country's anti-graft body who were suspended after being named suspects in criminal cases
Yudhoyono suspended Antasari Azhar, chief of the CorruptionEradication Commission, or KPK, in May after police named him a suspect in a murder case. On Sept. 21, the president suspended
two of KPK's four deputies, Chandra Hamzah and Bibit Rianto, after they were charged with abusing their powers in issuing travel bans against two people being investigated for corruption.
The five-man panel, which has until Oct. 1 to make its recommendations, comprises Justice Minister Andi Mattalata, Adnan Buyung Nasution and Todung Mulya Lubis, both lawyers,
Taufiequrachman Ruki, a former KPK chief, and Widodo, Security Minister.

Battle in Century lingers

Vice President Jusuf Kalla confessed he was not notified about the bailout, which aims to rescue the collapsing Bank Century last year.
Kalla also admitted he was unaware that the amount of bailout fund had increased to IDR6.7 trillion. "We have to be swift in dealing with the crisis. We should not tackle the problem by injecting funds again and again since the real problem doesn't lie there."
But, Minister of Finance Sri Mulyani said, asserting all decisions made by the Minister of Finance as the Chairperson of the Financial System Stabilization Committee (KSSK) are justified by sound legal grounds, namely by Perppu 4/2008 on JPSK and LPS Law 24/2004.
BI on November 20, 2008 sent letter 10/232 on the classification of Bank Century as a default bank to the Minister of Finance and said the bank was potential to pose systemic risks.
At the same time, BI also sent letter 10/2 asking for a KKSK meeting. The meeting later decided the bank had to be rescued since it was potential to pose systemic risks.
The handling of the case was left to LPS in accord with Law 24/2004 on LPS. Within nine months after the takeover in November 2008, the institution had injected a total IDR6.76 trillion fund in four installments.
So who responsible with the decision ??

SBY-Boediono to Win in One Round

The SBY-Boediono duet is estimated to win the 2009 presidential election in one round based on the results of quick counts made by several survey institutions. The duet, backed by the coalition of the Democrat party, is estimated to rake in 60% votes.
In the meantime, the three presidential candidates ask the people to be calm in responding to quick count results released by several survey institutions. Megawati Soekarnoputri, Susilo Bambang Yudhoyono, and Jusuf Kalla together agree to wait for the official count by the General Elections Commission (KPU), which will be held from July 22 through 24.

Battle in Indonesia Presidential Election

Megawati Soekarnoputri chose a former commander of Indonesia' s special forces, Prabowo Subianto, as her running mate in the nation's July presidential election.
Megawati, who served as president from 2001 to 2004, may broaden her appeal to voters with the choice of Prabowo, son-in- law of another former leader, Suharto, who died last year.
Incumbent President Susilo Bambang Yudhoyono boosted his chances for re-election in April 9 parliamentary elections when his Democrat party won 20.85 percent of the vote to become the
nation' s biggest legislative force.
Megawati' s Indonesian Democratic Party for Struggle is set to slip to number 3 in parliament behind Golkar, the party linked to Suharto and now led by Vice President Jusuf Kalla, who has
named former army chief Wiranto as his running mate in the
presidential race.
Prabowo, now heads the Great Indonesia Movement Party (Gerakan Rakyat Indonesia Raya).
Yudhoyono last week announced his choice of Boediono, governor of the nation' s central bank, as his running mate.

Demokrat win the election

Indonesia's General ElectionCommission said President Susilo Bambang Yudhoyono's Democrat
party won 20.85 percent of the national votes in the April 9 parliamentary elections.
The election featured more than 171 million eligible voters. A total of 104 million votes were valid, less than the 113.46 million of the ballot in the 2004 elections.
Parties that win more than 2.5 percent of the national votes are eligible for seats in parliament.