AAG not backing down in tax fight

The Jakarta Post ,  Jakarta   |  Wed, 05/16/2007 7:51 AM  |  Business

Andi Haswidi, The Jakarta Post, Jakarta

A legal representative of Asian Agri Group (AAG) has challenged tax evasion allegations made by the tax office, dismissing them as ""groundless"" while insisting that any shortfalls in tax figures were the result of honest mistakes.

""Calculations on taxes may not always be precise. If there is a correction to figures that needs be paid, we are ready to do so as long as the proposed figure is reasonable,"" the palm oil firm's lawyer, Dwiyanto Prihartono, told The Jakarta Post Tuesday.

However, he was quick to add that the estimated figure released by the tax office was ""ridiculous and groundless"".

The Finance Ministry's Tax Directorate General claimed Monday to have found proof of a series of tax evasions allegedly conducted by 14 of AAG's 15 subsidiaries within the period of 2002 to 2005, at an estimated cost of Rp 2.62 trillion (about US$300 million) to the state.

Five company officials, identified only as LA, WT, ST, TBK and AN, have been named suspects under the case.

AAG itself is a subsidiary of Raja Garuda Mas, which is owned by Sukanto Tanoto, Indonesia's richest businessman, according to Forbes magazine's Asian edition, with an estimated wealth of $2.8 billion.

""We know exactly that Darmin's calculations are totally off. We know exactly where his mistakes are,"" Dwiyanto said referring to Tax Director General Darmin Nasution.

He said that none of the five company officials who had been named suspects had been questioned by the authorities.

""How can they name the five officials as suspects without first questioning them?"" he said.

The allegations first surfaced when the group's financial controller, Vincentius Amin Sutanto, went public in December, saying that he had documents detailing that the firm had been evading paying taxes by transferring profits to several affiliated firms in Hong Kong, the British Virgin Islands, Macao and Mauritius, and giving false company records in tax payment forms.

Vincentius, who previously fled to Singapore to escape another investigation by the police over allegations of attempting to embezzle $3.1 million from AAG, admitted shortly after surrendering himself to the police in December that he too took part in masterminding the tax-evasion scheme.

Vincentius now faces trial at the West Jakarta District Court for embezzlement.

""Vincentius has openly said that he took part in planning the so-called tax evasion scheme. Then how come he is not named as one of the suspects just like the rest five officials?"" Dwijanto said.

Earlier, AAG corporate secretary Roni Viktor Sinaga told the Post that the company had been preparing an internal audit to investigate the possibility of tax evasion.

""We are ready to cooperate with the authorities in the upcoming procedures,"" he said.

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