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View all search resultsAnalysis: Adaro witness summons revives questions over tycoon rivalry
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PT Adaro Energy. (Reuters/File)
T
he corruption investigation into the Banjarmasin Medium Tax Office (KPP Madya) has taken an unexpected turn, with the Corruption Eradication Commission (KPK) examining senior tax officials linked to Adaro, one of Indonesia’s largest business groups. The development has brought renewed attention to Adaro’s long and complicated ownership history, including a past dispute involving businessman Hashim Djojohadikusumo, the younger brother of President Prabowo Subianto.
The KPK summoned Jul Seventa Tarigan, a former head of tax at PT Adaro Energy Tbk, as a witness in the Banjarmasin tax-corruption investigation. Jul was scheduled to be questioned on Aug. 19, but did not attend. The KPK said it was seeking information on the tax-audit process and mechanisms at KPP Madya Banjarmasin, rather than limiting its inquiry to Adaro’s own tax affairs. It was not the first time the KPK has sought information from an Adaro-linked executive in the case. In April, the agency summoned Edward Ennedy Rorong, finance director of Adaro Wamco Prima, as a witness. Edward also did not attend.
The investigation began with a sting operation on Feb. 4, in which the KPK arrested KPP Madya Banjarmasin Head Mulyono, PT Buana Karya Bhakti (BKB) Finance Manager Venasius Jenarus Genggor and tax auditor Dian Jaya Demega. The KPK seized Rp 1 billion (US$56,700) during the operation. The case concerns BKB’s 2024 value-added tax (VAT) restitution application. An audit found a Rp 49.47 billion tax overpayment, followed by a Rp 1.14 billion fiscal correction that reduced the approved restitution to Rp 48.3 billion. Mulyono allegedly sought a Rp 1.5 billion “appreciation payment” in connection with the restitution.
After KPP Madya Banjarmasin issued the tax-overpayment assessment and refund decision, the restitution was disbursed on Jan. 22. According to the KPK’s case reconstruction, BKB used a fictitious invoice to facilitate payment of the agreed Rp 1.5 billion. The money was then divided, with Rp 800 million allegedly going to Mulyono, Rp 200 million to Dian and Rp 500 million to Venasius. Venasius subsequently deducted Rp 20 million from Dian’s share.
The KPK’s decision to examine Adaro-linked tax officials is notable because of the group’s longstanding presence in South Kalimantan, where the investigation is centered. It also comes as the agency broadens its inquiry beyond the original BKB transaction. In August, the KPK said it had found indications of other payments involving officials at KPP Madya Banjarmasin and was gathering additional evidence, including in a potential money-laundering investigation.
That broader inquiry has brought a historical dimension to the case. Adaro was once partly controlled by Hashim Djojohadikusumo, who held a 40 percent stake through Asminco Bara Utama. In October 1997, Asminco secured a US$100 million bridge loan from Deutsche Bank using its Adaro shares as collateral. After the Asian financial crisis, Asminco defaulted. Deutsche Bank subsequently took control of the shares and sold the stake to PT Dianlia Setyamukti for US$46 million in 2001.
Hashim later pursued the matter through Beckett Pte Ltd, alleging a conspiracy surrounding the sale. In 2007, however, a Singapore court rejected the conspiracy claim and awarded only symbolic damages. The ruling effectively ended Hashim’s legal claim to the Adaro stake.
