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Jakarta Post

Anti graft body may detain ex-Garuda Indonesia CEO on Rolls Royce deals

  • News Desk

    The Jakarta Post

Jakarta   /   Fri, January 20, 2017   /  06:27 am
Anti graft body may detain ex-Garuda Indonesia CEO on Rolls Royce deals The Corruption Eradication Commission (KPK) chairman Agus Rahardjo (right) along with KPK deputy chairman Laode M Syarif hold a press conference to name former president director of state-owned airline company Garuda Indonesia, Emirsyah Satar, a suspect in a case of alleged bribery related to the purchase of aircraft engines from the UK company, Rolls Royce. (Antara/Puspa Parwitasari)

The Corruption Eradication Commission (KPK) may detain former president director of Garuda Indonesia Emirsyah Satar after being named as a suspect in a case of alleged bribery related to the purchase of aircraft engines from UK company Rolls Royce, the body's spokesperson has said. 

“If it already fulfills the requirement of article 21 of the Criminal Code Procedure [on detaining a suspect], it opens the possibility for detention,” KPK spokesperson Febri Diansyah told The Jakarta Post on Thursday, adding that KPK would carry out an investigation before making such decision.

In the investigation, KPK would conduct activities such as searching, seizures, questioning witnesses and detention, according to Febri. He added the commission had searched locations and seized evidence related to the case, then scheduled to question witnesses and the suspect.

KPK chairman Agus Rahardjo announced yesterday that the former Garuda Indonesia CEO had been involved in cross-border corruption case. Emirsyah was accused of receiving bribes in connection with a corrupt act involving the UK’s engineering behemoth, RollsRoyce Holdings.

The KPK and the SFO implicated Emirsyah in a transnational conspiracy crafted by Rolls-Royce to help it secure major deals to provide aircraft engines to at least 12 countries, including Indonesia.

Apart from Emirsyah, who is now CEO of the Lippo Group’s online retailer MatahariMall.com, the KPK also named Soetikno Soedarjo — the owner of diversified business group Mugi Rekso Abadi (MRA) — a suspect in the case.

Sutikno is the beneficial owner of Singapore-based Connaught International Pte Ltd., which has been accused of functioning as a broker to pass on the bribe money from Rolls-Royce.

The KPK accused Emirsyah of accepting bribes from Sutikno in the form of money amounting to €1.2 million and US$180,000, as well as “things” equal to $2 million that were detected in Indonesia and Singapore.

KPK chairman Agus Rahardjo said the alleged bribery was uncovered through what he called “intensive” cooperation with the SFO, which investigated the primary case in the UK, and the Corrupt Practices Investigation Bureau (CPIB) of Singapore, which was the agency that indicated the bribe money was transferred from Connaught to Emirsyah’s account in a “bank registered in that country”.

“This is a part of a transnational anticorruption practice, so we would keep in touch with the SFO and the CPIB. The two agencies are now investigating other suspects related to the case,” Agus said.

It was revealed that RollsRoyce has admitted to the “bribery of senior foreign officials and senior staff” over a period spanning 25 years in countries such as Indonesia, Thailand, India, Russia, China and Malaysia, adding that it was the “biggest investigation in the history of the SFO”.

Agus said the case centered on the procurement of 50 Airbus planes by Garuda between 2005 and 2014, during which Emirsyah served as the company’s president director. He did not detail whether all of the planes used engines made by Rolls-Royce.

Agus alleged the bribe money only went to Emirsyah, emphasizing that Garuda “has not benefited at all from the bribery”.

The corruption case was not related more to individual actions and not Garuda’s activities as a company, the airline said in a statement. Garuda is fully cooperating with KPK in its investigation.

KPK deputy chairman Laode Muhammad Syarif confirmed that Garuda as an institution was not involved in any way in the case.

“Because this is an individual corruption case, Garuda will not be implicated,” he said.

(Read also: Ex-Garuda Indonesia CEO named as corruption suspect on Rolls-Royce engines purchasing)

Garuda shares plunged by 2.26 percent on Thursday to Rp 346 apiece following the revelation of the bribery case.

According to Bloomberg, Rolls-Royce won approvals in the U.K. and the U.S. for settlements after it said it would pay $800 million in total to resolve bribery probes in both countries as well as Brazil.

The British indictment includes the example of one individual in Indonesia receiving $2.25 million and a Rolls-Royce Silver Spirit car from the company, which has admitted to paying bribes to secure contracts in countries including Thailand, Kazakhstan, Azerbaijan, Angola and Iraq.

Emirsyah served as the chief executive of Garuda for a decade through 2014, overseeing a debt restructuring and an initial public offering that allowed it to expand its fleet to 134 aircraft. He’s currently the chairman of Lippo Group’s MatahariMall.com, or PT Global ECommerce Indonesia.

His performance and contribution as MatahariMall.com chairman have been very positive and the company will respect the legal process,  Alvin Aulia, head of communications and partnership, said in a text message.

Garuda slid 2.3 percent to 346 rupiah at the close in Jakarta, the most since Dec. 30, while shares of PT Matahari Department Store, which holds about 10 percent stake in MatahariMall.com, rose 1.3 percent to 14,900 rupiah. (ebf/jun)