AGO prepares to investigate Indomobil case

AGO prepares to investigate Indomobil case

The Jakarta Post, Jakarta

The Attorney General's Office (AGO) is quietly making
preparations to launch an investigation into the sale of the
government stake in the country's second-largest car maker PT
Indomobil Sukses Internasional.

AGO spokesman Barman Zahir said over the weekend that the
office had begun collecting information relating to the case
including from people familiar with the transaction.

Reports earlier said that the AGO had summoned senior
officials of the Indonesian Bank Restructuring Agency (IBRA) for
this purpose.

Barman declined to confirm the reports.

But if an investigation is launched, it could implicate former
chairman of the Indonesian Bank Restructuring Agency (IBRA) I
Gede Putu Ary Suta, who was fired by State Minister of State
Enterprises Laksamana Sukardi last week.

The government, via IBRA, sold more than 72 percent of its
stake in Indomobil in December to a consortium led by PT Tri
Megah Securities.

But the hurried deal was roundly criticized by experts,
particularly due to its low price and lack of transparency;
raising suspicions that company founder, the Salim Group, was
behind the deal.

IBRA sold the shares at only Rp 625 each, far lower than the
Rp 2,500 per share that the government paid when it acquired the
company in 1998.

The relatively short period for due diligence process had also
raised speculation that only investors linked to the Salim Group
were willing to submit bids as other investors would be in no
position to make a proper assessment of Indomobil.

Indomobil was part of the assets transferred by Salim to IBRA
to repay debts to the government. Salim, however, was barred from
re-purchasing the assets including Indomobil.

The Business Competition Supervisory Commission (KPPU) has
launched a separate investigation into the Indomobil case.

Last week, a KPPU official said that there were strong
indications of anomalies in the Indomobil transaction.

Sutrisno Iwantono said that the commission planned to
accelerate the investigation so that it could be completed
earlier than the initial June deadline.

KPPU earlier said that the investigation could lead to either
the cancellation of the deal, or a fine of between Rp 1 billion
(or US$100,000) and Rp 25 billion against the buyer if there is
proof that the law was broken.

KPPU is an agency established by the government to enforce
Antimonopoly Law No. 5/1999 which prohibits businesses from
conspiring with other parties to win a tender.

The controversy surrounding the Indomobil sale only adds to
the various questionable asset sales and restructuring deals
implemented by IBRA.