Please Update your browser

Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.

Jakarta Post

Asian Agri set to lose assets

  • Yuliasri Perdani and Nadya Natahadibrata

    The Jakarta Post

Jakarta   /   Fri, January 10, 2014   /  09:32 am

The Attorney General'€™s Office (AGO) is preparing to confiscate assets belonging to the Asian Agri Group, an agribusiness giant found guilty of tax evasion in 2012, if the firm fails to pay Rp 2.52 trillion (US$206.6 million) in fines by Feb. 1.

Attorney General Basrief Arief said on Thursday that his office had determined which assets of the company the AGO would confiscate, including Asian Agri'€™s 165,000 hectares of plantation land in Jambi, Riau and North Sumatra.

'€œAside from that, we have also collected information on 19 palm oil refineries in the three provinces as well as office buildings belonging to its 14 subsidiaries. We estimate the total value of the assets is around Rp 5.3 trillion,'€ he told a press conference on Thursday.

Basrief said he had dispatched a special team in December last year to track down Asian Agri'€™s assets that were registered as collateral for loans from the Credit Suisse Group in London.

Asian Agri apparently used some of its assets as a guarantee to obtain a $125 million loan from the Swiss-based bank.

The AGO also confirmed that it had asked State-Owned Enterprises Minister Dahlan Iskan to keep the operations of the plantations and oil refineries running in the event the agency moves to seize the assets.

'€œAfter the seizure, the plantations and mills will continue to operate, to normal or even maximum capacity. This is to ensure that the livelihoods of the company'€™s employees will not be affected,'€ Dahlan said at the press conference, which was held at AGO headquarters in South Jakarta.

The case surrounding Asian Agri is the biggest and most controversial tax evasion case in the nation'€™s history, involving one of the largest oil palm plantation companies.

Currently, the company employs 25,000 people and has partnerships with 29,000 plasma farmers.

Asian Agri, which was founded in 1979, is owned by tycoon Sukanto Tanoto, the 10th-richest person in the country with a net worth of $2.3 billion '€” according to Forbes'€™ 2013 list of Indonesia'€™s 50 richest people.

Asian Agri'€™s problems began in 2006, when the firm'€™s then-comptroller, Vincentius Amin Sutanto, was reported to the police for embezzling $3 million from the company.

He fled to Singapore, from where he hit back at his former employer by making public allegations that Asian Agri was committing tax evasion.

In 2007, Vincentius was sentenced to 11 years'€™ imprisonment for money laundering and his participation in the tax evasion scheme.

The Supreme Court ruled on Dec. 18, 2012, that the company had 12 months from the announcement of the verdict to pay Rp 2.5 trillion in fines or 200 percent of its tax obligation, or its assets would be confiscated.

In 2012, the Supreme Court also found Asian Agri'€™s former tax manager, Suwir Laut, guilty of understating the annual tax obligations of Asian Agri'€™s 14 subsidiaries between 2002 and 2005, which led to state losses of potential revenue of Rp 1.26 trillion.

Aside from sentencing Suwir to two years in prison, the court ordered the company to pay Rp 4.4 trillion, comprising Rp 1.9 trillion in back taxes and another Rp 2.5 trillion in fines.

Basrief said that Asian Agri had to pay the fines by Feb. 1, one year after the AGO had given the company a copy of the verdict.

Director general of taxation Fuad Rachmany said Asian Agri had in fact asked for a lower tax obligation via an appeal to the Taxation Court.

'€œThe firm paid half of its Rp 1.9 trillion tax obligation, as a prerequisite to filing an appeal with the court. The payment of the remaining amount will be based on the court'€™s verdict. The appeal may convene in the middle of this year,'€ he said.

Fuad also implied that his office could confiscate Asian Agri'€™s assets to pay the remaining tax obligation before the Taxation Court issued a ruling.

'€œAccording to the Tax Collection Law, an appeal request does not stop the tax collection process. If there is a strong reason, we will commence a process of confiscation before the court makes a decision. So, I call on the company to pay its tax obligation right away,'€ he said.

In a press statement made available to The Jakarta Post on Thursday, Asian Agri general manager Freddy Widjaja said the company '€œhas always abided by the law in the country and has always fulfilled its tax obligations'€.

He added that Asian Agri'€™s motivation in requesting the appeal was to '€œget a fair decision on a groundless tax obligation'€ and to obtain details on the calculation of the tax obligation and fines.

Freddy also confirmed that the company had registered some of its assets as collateral with Credit

Your premium period will expire in 0 day(s)

close x
Subscribe to get unlimited access Get 50% off now