Govt moving ahead with investigation of AAG

The Jakarta Post ,  Jakarta   |  Tue, 11/06/2007 5:10 PM  |  Business

Andi Haswidi, The Jakarta Post, Jakarta

The tax office is pressing ahead with its probe into tax evasion allegations against the Asian Agri Group (AAG), although the CPO-producing giant said Monday it had not been informed of the case's progress and asked for clarity.

The Finance Ministry's taxation office has been investigating the company and its 14 subsidiaries since May after finding preliminary proof of tax fraud, with director general Darmin Nasution already ruling out an out of court settlement.

On AAG's part, however, the company has asked for transparency in the progress of the case for the sake of company operations.

""Our officials have been summoned continuously up until now and there hasn't been any clear result. We hope there will be clarity on our status soon,"" AAG corporate secretary Rudi Viktor Sinaga told The Jakarta Post.

The investigation, which is being carried out by a joint team comprising senior officials from the directorate general and the Corruption Eradication Commission (KPK), at first estimated the state had lost up to Rp 2.62 trillion (about US$300 million) through a series of tax evasions conducted from the beginning of 2002 until the end of 2006.

Later, officials quoted in various media said that the total loss was about Rp 794 billion, but the figure later changed again to Rp 1.3 trillion.

AAG is a subsidiary of Raja Garuda Mas, which is controlled by Sukanto Tanoto, dubbed by Forbes magazine's Asian edition as Indonesia's richest businessman with an estimated wealth of US$2.8 billion.

Rudi said that a clear figure on possible state losses due to what he said were ""honest administrative mistakes"" and a clear status for the case would be good so that the company could act accordingly.

Earlier, Darmin, backed by a statement from Finance Minister Sri Mulyani Indrawati, said that the government would consider no other way of resolving the case but in court.

""We will continue to pursue this case until its very end,"" he said, refuting rumors that the government was considering other options.

Among the alternatives talked about was AAG paying the unpaid tax. Rudi said his company had made such an offer to the government but was yet to receive a clear response.

According to the 2007 Taxation Law, the attorney general can stop an investigation of a tax offender if the person pays what is owed and is fined four times the amount of the unpaid tax.

So far, the investigators have questioned 56 officials from AAG and its 14 subsidiaries and named at least eight as suspects.

The case first surfaced when the group's financial controller Vincentius Amin Sutanto, went public in December, saying that he had documents detailing how the firm had evaded 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 payments.

Vincentius, who previously fled to Singapore to escape another investigation by the police over allegations of attempting to embezzle $3.1 million from AAG, said he had taken part in masterminding the tax evasion.

He now faces 11 years imprisonment after being found guilty by the West Jakarta District Court for embezzlement in August.

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