Asian Agri to challenge Supreme Court on tax fine

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The Asian Agri Group says it will challenge a recent Supreme Court ruling ordering it to pay a Rp 2.5 trillion (US$259.07 million) fine for tax evasion.

A lawyer for the giant oil palm firm, owned by tycoon Sukanto Tanoto, said that the Supreme Court had exceeded its authority in handing down its decision.

“We are going to submit a case review request as soon as we receive an official copy of the court’s ruling,” Asian Agri lawyer Muhammad Dja’far Assegaf told reporters at a press conference in Central Jakarta on Tuesday.

The Supreme Court imposed the fine for a tax evasion case engineered by Suwir Laut, Asian Agri’s former tax manager.

Assegaf said that the court’s ruling was improper and should not be implemented by local prosecutors.

“Prosecutors named Suwir Laut as the only defendant in its official indictment. How can the court impose a fine on Asian Agri?” he said.

The court also ordered Asian Agri to pay Rp 1.26 trillion in back taxes, which another Asian Agri’s lawyer, Luhut Pangaribuan, claimed was inappropriate.

“Eight of 14 Asian Agri subsidiaries have settled their tax payment issues with the tax court, while the rest are deliberating on their own tax dispute settlements with the tax court,” Pangaribuan said.

“The ruling on tax payment obligations is not executable, as it overlaps with the ruling from the tax court,” he said.

Finance Ministry taxation chief Fuad Rahmani said on Monday that Asian Agri had to comply with the ruling and pay its fine and back taxes. “The court’s ruling was final and binding,” Fuad said.

Fuad also said officials had learned much from the Asian Agri’s case that would benefit auditors.

“None of our auditors were implicated in any wrongdoing in the case,” Fuad said. “Nevertheless, we will improve our internal monitoring and capacity building development system to prevent potential evasion from taking place in the future,” he said.

Asian Agri is one of the most controversial tax evasion cases in the nation’s history, involving one of Indoneisa’s largest palm oil plantation companies.

The firm was founded in 1979 and owns 70,000 hectares of plantations in Sumatra.

The scandal came to light in 2006, when the firm’s then comptroller, Vincentius “Vincent” Amin Santoso, was reported to the police for embezzling $3 million from Asian Agri.

Vincent escaped arrest and fled to Singapore, where he made public allegations that Asian Agri was evading taxes.

He was subsequently sentenced to 11 years’ imprisonment for money laundering and his participation in the tax evasion scheme.

Vincent was paroled earlier this month for collaborating with prosecutors to unravel the full extent of tax evasion practices at Asian Agri.

Separately, Asian Agri general manager Freddy Widjaja said that the court’s ruling would have little impact on the company’s daily operations and that the firm had no plans to leave Indonesia.