Wed, 09 Mar 2005

House alleges wrongdoing in Texmaco asset sales

Ridwan Max Sijabat, The Jakarta Post, Jakarta

A House of Representatives' commission called on the police to investigate possible conspiracy in the recent controversial asset sale of PT Perkasa Indosteel, a unit of the troubled Texmaco Group.

Ade Komaruddin, chairman of House Commission VI dealing with industry and state enterprises, said his commission was concerned by the decision of a district court in the West Java town of Subang to order Indosteel's assets auctioned off. He said the assets were treated like "discarded goods", causing huge losses to the state.

"It is very strange that Indosteel's machines, worth US$300 million, were sold for $3 million at 'a public auction' because they were auctioned off as scrap metal at a price of Rp 1,250 (13 US cents) per kilogram," he said here on Tuesday.

He said the auction was held on Feb. 15 by the local office of the state assets and auctions division in Subang, at the order of the district court.

Accompanied by two commission members, Lily Asdjudiredja and Djoko Purwongemboro, Ade said the auction lacked transparency, with only one company, steel mill PT Interworld Steel, participating.

"The auction was announced in a small newspaper in Bandung, West Java, only two days before the auction," he said.

The Subang District Court, in a Dec. 13, 2004, decision, ordered the sale of the assets of Indosteel, which produces military equipment, trucks and other machines, among other items.

The sale was ordered after Indosteel workers had not been paid for months because of massive cash flow problems.

The government has suspended the execution of the public auction at the request of the House.

Lily said Texmaco had appealed the suspension to a higher court.

Ade said his commission had established a working committee to rescue Indosteel, which plays a strategic role in producing military equipment, trucks, buses and farming equipment.

"The House is committed to salvaging Texmaco's engineering division because, besides employing more than 11,000 workers, it has absorbed a huge amount of money from the government," he said.

He said Indosteel could be treated as a state enterprise because the government owned 70 percent of its shares.