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Jakarta Post

Asian Agri agrees to pay Rp 2.5 trillion fine in installments

  • The Jakarta Post

    The Jakarta Post

Jakarta   /   Sat, February 1, 2014   /  10:12 am

A palm oil conglomerate found guilty of tax evasion in 2012, has agreed to pay Rp 2.5 trillion (US$204.8 million) in fines in a deal that will allow the company to pay the fine in installments.

Attorney General Basrief Arief said on Thursday that the Asian Agri Group had agreed to pay the fine imposed by the Supreme Court, which would be carried until October this year.

Speaking in a press conference, Basrief said the company had paid nearly Rp 720 billion on Jan. 28 and would settle the remainder with installments of Rp 200 billion each month until October through the Attorney General Office'€™s (AGO'€™s) account in state-owned lender Bank Mandiri.

'€œWe choose the option because we'€™ve also considered the fate of thousands of people working in the company'€™s 14 subsidiaries involved in the tax fraud,'€ he said, adding that the business units employed 25,000 people and had partnerships with 29,000 farmers.

Asian Agri, which is owned by tycoon Sukanto Tanoto '€” Forbes magazine'€™s 10th richest person in the country with a net worth of $2.3 billion '€” is obliged to pay a fine of Rp 2.5 trillion or 200 percent of its tax obligation between 2002 and 2005. In addition, the company was also ordered to pay Rp 1.9 trillion in back taxes.

The Supreme Court found the company'€™s former tax manager Suwir Laut guilty of understating the annual tax obligations of the company'€™s 14 subsidiaries throughout the period. The court ruled on Dec. 18, 2012, that Suwir was sentenced to two years'€™ imprisonment and that the fines had to be borne by the company.

'€œWe will comply with the Supreme Court ruling and use both internal cash and external funds [loan] to save the lives of thousands of people working for us,'€ said Asian Agri general manager Freddy Wijaya, separately.

He added that by paying the fines, he expected his company could normally operate its activities so that it would be able to meet its target of producing 1 million tons of crude palm oil (CPO) this year.

'€œWe hope the government will stop freezing the company'€™s assets so the company can resume its operations and earn more profit, resulting in its ability to quickly pay the total amount of the fines,'€ said Asian Agri lawyer Yusril Ihza Mahendra.

Basrief confirmed the AGO would lift the asset-freezing this week as the company had shown its commitment to pay the fines. '€œWe have frozen the company'€™s assets to prevent it from dissipating its assets beyond the court'€™s jurisdiction,'€ he told reporters, refusing to explain the details of the frozen assets.

The AGO was reported to have seized the assets of the company'€™s 14 subsidiaries with a total value of
Rp 5.3 trillion, if the company failed to pay the fines until Feb. 1, as decided by the Supreme Court.

Finance Ministry director general of taxation Fuad Rachmany said on Thursday he company must still pay Rp 1.9 trillion in back taxes.

'€œHowever, Asian Agri is to file an appeal over the back taxes with the Taxation Court. The firm has paid around Rp 900 billion as a prerequisite to filing the appeal. The payment of the remainder will be based on the court'€™s verdict,'€ he said.

Yusril said his client would file an appeal with the Taxation Court, saying that the Supreme Court ruling was bizarre.

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