Tax office passes AAG's tax fraud dossier to AGO

The Jakarta Post ,  Jakarta   |  Sat, 04/26/2008 12:02 PM  |  Headlines

The Finance Ministry's Directorate General of Taxation handed over the first set of 25 dossiers on alleged tax fraud by the Asian Agri Group (AAG) to the Attorney General's Office on Friday.

"The first set includes three dossiers connecting suspects WT, ST and GBS to the fraud. The rest will follow in the coming weeks," head of investigations and intelligence at the tax office, Pontas Pane, said.

He said the dossiers contained evidence the three suspects lied to the tax office and stole Rp 80 billion (US$8.7 million) of state money.

"(The figure) is quite modest compared to the total estimated loss," he said.

The fraud cost the state Rp 1.3 trillion.

Pontas said there were 12 suspects in total, all members of the company's board of directors.

"The financial losses and the suspects could increase, depending on how this case evolves as we continue the investigation," he said.

He said the suspects lied to tax officers by reporting fictitious expenses, marking up management fees and transferring losses to subsidiary companies.

"The AGO will decide what legal steps should be taken next," Pontas said.

AAG communications manager Rudi Victor Sinaga has consistently denied allegations of tax evasion.

He said administrative mistakes could have occurred and the AAG was ready to return the unpaid taxes.

He accused the tax office of being unclear in its investigation.

"We never received any notice our tax payment was not enough. Why do the files have to be taken to the AGO when we can handle this administratively?" Rudi said.

The company's lawyer, Dwiyanto Prihartono, said the estimated figure released by the tax office was "ridiculous and groundless".

The tax office and the Corruption Eradication Commission have been investigating the AAG, which is controlled by tycoon Sukanto Tanoto, and its 14 subsidiaries for tax fraud since May 2007.

Taxation director General Darmin Nasution has claimed to have proof of a series of tax evasions by the group's subsidiaries between 2002 and 2005.

Three other company officials, identified only as LA, TBK and AN, were also named as suspects.

The case first surfaced when the company's financial controller, Vincentius Amin Sutanto, produced documents detailing how the AAG had evaded taxes by submitting falsified company records to the tax office and transferring profits to a number of its affiliates in Hong Kong, the British Virgin Islands, Macau and Mauritius.

Vincentius, who said he had masterminded the tax evasion scheme, was found guilty of embezzling Rp 3.1 million from the AAG. He was sentenced to 11 years in prison by the West Jakarta District Court in August 2007.

Forbes magazine's Asian edition dubbed Sukanto Tanoto as Indonesia's richest businessman with an estimated wealth of US$2.8 billion. (anw)

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