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Garuda accepts decision over 'incorrect' financial statement
To make matters worse, the Indonesia Stock Exchange (IDX) also announced that the company would be fined Rp 250 million.
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A cargo plane of Garuda Indonesia. The airline has been fined Rp 100 million ($7,080) by the Financial Services Authority (OJK) for publishing a misleading financial statement. (Courtesy of/flyawaysimulation.com)
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ational flag carrier Garuda Indonesia has lowered its guard after previously defending its 2018 financial report, which according to the Finance Ministry and the Financial Services Authority (OJK) contains “incorrect” financial statements.
“We fully respect the decision and will follow it up to the best of our ability. Garuda Indonesia will also communicate and ask for advice from decisionmakers in regard to what the company can do to adhere to the decision,” said Garuda Indonesia president director Ari Askhara as quoted by the airline’s press release on Sunday.
The government’s orders would not affect the airline’s financial condition as cash flow would remain positive, he was quoted as saying by Antara. His statements came after the government ordered the airline to restate its 2018 financial statement and annual report last Friday, within the next 14 days, while the OJK fined it Rp 100 million ($7,080). The order follows a recent joint investigation by the OJK, which found false information in Garuda’s financial statement.
The investigation was opened following reports of Garuda commissioners Chairul Tanjung and Dony Oskaria refusing to approve the company’s financial statement owing to discrepancies.
In an objection letter issued to the management on April 2 obtained by The Jakarta Post, Chairul and Dony said the inclusion of the potential income of US$239.94 million it would receive from a 15-year contract awarded to PT Mahata Aero Teknologi to provide onboard Wi-Fi services and inflight entertainment in airplanes operated by its subsidiaries Citilink Indonesia and Sriwijaya Air was inappropriate.
The objection was based on the fact that Garuda had yet to receive any payment from the 15-year contract.
“The contract also did not mention a clear terms of payment,” the letter read. “The two companies, in fact, were still negotiating the payment procedures.”
