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Jakarta Post
The Jakarta Post
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'€˜Godfather of fuel'€™ on the brink

  • Ayomi Amindoni and Arif Gunawan S.

    The Jakarta Post

Jakarta | Thu, December 10, 2015 | 07:02 am
'€˜Godfather of fuel'€™ on the brink Under investigation: Oil businessman Muhammad Reza Chalid at his son’s wedding party in 2014. Reza is now believed to be abroad and the Attorney General’s Office, the National Police and the Law and Human Rights Ministry are now cooperating to monitor his movements and again summons him to a House of Representatives ethics council (MKD) hearing to give testimony as a witness in House Speaker Setya Novanto's alleged misconduct case. (Tempo)

Oil businessman Muhammad Reza Chalid at his son'€™s wedding party in 2014. Reza is now believed to be abroad and the Attorney General'€™s Office, the National Police and the Law and Human Rights Ministry are now cooperating to monitor his movements and again summons him to a House of Representatives ethics council (MKD) hearing to give testimony as a witness in House Speaker Setya Novanto's alleged misconduct case. (Tempo)

The man is like a shadow, avoiding media exposure while quietly raking in trillions of rupiah over the last decade by controlling Indonesia'€™s imported fuel business. But some light has exposed the shadow after a conversation with Maroef Sjamsoeddin, the president director of gold-mining firm PT Freeport Indonesia, leaked out to the public.

The name of the shadow is Muhammad Reza Chalid, known as '€œgasoline godfather,'€ a kingpin in the fuel import business. The kingpin now finds himself in the vortex of a scandal that involves him and House of Representatives Speaker Setya Novanto allegedly attempting to secure shares and a project from Freeport in exchange for a contract extension for the mining-giant'€™s operations in Papua.

The 53-year-old businessman of Arab descent was caught on tape allegedly orchestrating the scheme with Setya. The House'€™s ethics council released a recording of the incriminating conversation to the public last week.

Reza is a controversial businessman who allegedly involved in oil business valued at US$30 billion annually.

Reza and Setya'€™s possible corruption was exposed by Energy and Mineral Resources Minister Sudirman Said to the House'€™s ethics council on Dec. 2.

"I received a report saying that Maroef was surprised when he met with Reza in the meeting room. First, Reza has no connection at all with Freeport. Second, everyone knows that he is controversial and has always been linked with oil-and-gas affairs," said Sudirman to the council, intimating Reza'€™s connection to the so-called '€œfuel mafia'€.

Maroef claimed that he met Reza two times. The first meeting occurred on May 13 on the 21st floor of the Ritz Carlton Pacific Place in South Jakarta. In the first meeting with Setya, Maroef was introduced to the oil tycoon.

"In this meeting, there was a discussion of how to do business with Freeport. In the second meeting, Reza and Setya expressed their business intentions," said Maroef at the council'€™s hearing last week.

After the scandal sparked nationwide condemnation, Reza disappeared from public view. According to a tempo.co report, Reza left the country four days ago.

"He is Indonesian citizen with an Indonesian passport, but he has left Indonesia," Law and Human Rights Minister Yasonna H. Laoly said.

Before the Freeport scandal emerged, Reza was often referred to as a meddling third-party actor who intervened in the procurement of fuel for Pertamina's subsidiary, Pertamina Energy Trading Ltd (Petral). It is thought by some that because of this interference, Pertamina received crude oil and fuel supplies at uncompetitive prices.

Some companies belonging to Reza include Supreme Energy, Paramount Petroleum, Straits Oil and Cosmic Petroleum. All of Reza'€™s Singapore-based companies are registered in the Virgin Islands, a country widely known as a tax haven for wealthy oligarchs.

Net importer country

Reza'€™s rise in fortunes can be traced back to 2003 when Indonesia admitted to the Organization of Petroleum Exporting Countries (OPEC) that it had become a net importer of fuel because of ballooning domestic oil consumption.

This febrile environment brought Reza, known to have established close relations with many at Pertamina management since the Soeharto era, to the peak of his fortune. He struck gold after Petral was granted an additional function; as the sole supplier of crude oil and fuel to Pertamina.

Reza'€™s fortunes, however, began to dry up after President Joko '€œJokowi'€ Widodo terminated Petral'€™s business in May 2015. In an example of irony, Reza then recklessly tried to expand his career into the gold mining sector, only to self-immolate.

And there are more dark storms ahead for Reza, in the form of the Attorney General'€™s Office (AGO). The AGO questioned Sudirman for the second time on Tuesday night, following on from its preliminary investigation into Setya'€™s alleged abuse of power.

"Law enforcement officials may feel there is a violation of the law, so they asked for my explanation. Let the law enforcement process conclude," Sudirman told journalist two hours after the meeting.

Arminsyah, the AGO's junior attorney general for special crimes, stated that the AGO'€™s investigation was in a preliminary phase because Reza, as a leading figure in the backroom conversation, had yet to give information.

"Riza has yet to be summoned. [Information from] Setya still needs to be examined further. Also, there are the staffers of Maroef and Setya who will need to be questioned," said Arminsyah.

Attorney General M. Prasetyo promised to keep investigating all possible crimes related to the recording, regardless of what the ethics council decided to do with Setya.

"It's a different thing. The ethics council is about ethics, while the AGO investigates crime. So, even though he [Setya] may be considered not guilty by the ethics council, the criminal investigation will continue," he said.

It is not yet clear how the saga involving Reza, Setya, Maroef and Sudirman will end. But one thing seems certain. Given his reputation as the '€œgasoline godfather'€, one could expect that Reza has enough muscle and ammunition to fire back if he wants to. (dan)

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