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Jakarta Post

Asian Agri on the way to defend 14 firms in tax scandal

  • Raras Cahyafitri

    The Jakarta Post

  /   Sat, June 15, 2013   /  11:31 am

Palm oil conglomerate Asian Agri says it will file an objection regarding its 14 units affected in a Rp 4.4 trillion (US$444 million) tax scandal.

'€œEvery tax payer has the right to file an objection as provided for in the [2008] tax law,'€ Asian Agri general manager Ferry Widjaja told reporters on Friday.

Asian Agri, which is owned by one of the country'€™s richest men, Sukanto Tanoto, is under the spotlight after director general of taxation Fuad Rachmany said last week that the palm oil group was obliged to pay Rp 2.5 trillion to the Attorney General'€™s Office (AGO) in fines and another Rp 1.8 trillion to the tax office in the form of back taxes.

The tax office has sent a tax assessment letter (SKP) to Asian Agri'€™s 14 business units that will need to give a response within 30 days, or the authority will seize their assets.

Asian Agri'€™s lawyer Luhut Pangaribuan said that a charge to Asian Agri'€™s 14 business units was '€œerror in persona'€, a term to describe that the ruling was mistakenly addressed to the wrong subject.

'€œThe one who was brought before the Supreme Court was Suwir Laut [not the 14 companies],'€ Luhut said, referring to the former Asian Agri tax manager. However, he added, Suwir remained out of prison provided that he, according to the ruling, committed no crime for three years after the ruling was handed down.

The Supreme Court late last year found Suwir guilty of providing false data on tax obligations of the 14 companies during the 2002-2005 period. He was then sentenced to two years in prison, with an additional three-year probation.

As a result of the ruling, Suwir will have to serve two years in prison only if he commits a crime during his three years of probation.

The Supreme Court also ordered the 14 companies to pay the fines within one year, or their assets will be seized and Suwir will be put behind bars.

Asian Agri'€™s tax scandal started in 2006, when it reported its then controller Vincentius Amin Santoso to police over $3 million in embezzlement. Vincentius fled to Singapore and hit back at the company for evading tax payment.

In 2007, Vincentius was sentenced to 11 years in prison for money laundering and falsifying signatures, but then released on parole in January this year after helping prosecutors reveal Asian Agri'€™s tax evasion practices.

Suwir'€™s lawyer, Mohammad Assegaf, said eight out of the 14 companies had undergone legal process in Tax Court. '€œWith the Tax Court'€™s ruling, the eight companies are punished twice,'€ Assegaf said.

Asian Agri was founded in 1979 and has 160,000 hectares of oil palm plantations across Sumatra. It owns 19 oil palm mills with a combined annual capacity in excess of 1 million tons.

Asian Agri'€™s units in the tax evasion scandal

 1. PT Supra Matra Abadi
 2. PT Nusa Pusaka Kencana
 3. PT Indo Sepadan Jaya
 4. PT Inti Indosawit Subur
 5. PT Tunggal Yunus Estate
 6. PT Mitra Unggul Pusaka
 7. PT Rigunas Agri Utama
 8. PT Raja Garuda Mas Sejati
 9. PT Hari Sawit Jaya
10. PT Andalas Inti Agro Lestari
11. PT Rantau Sinar Karsa
12. PT Gunung Melayu
13. PT Saudara Sejati Luhur
14. PT Dasa Anugrah Sejati

* The first eight companies are firms that Asian Agri claims have gone through legal processes in Tax Court

Source: Asian Agri