Commissioners out of Pertamina probe

Fabiola Desy Unidjaja and Urip Hudiono, The Jakarta Post, Jakarta

Following the suspension of Pertamina's financial director, Alfred Rohimone, two members of the state oil and gas firm's board of commissioners will be required to take no part in the investigation into alleged collusion in the sale of two of the company's tankers.

State Minister of State Enterprises Sugiharto told reporters on Monday that he had also asked other commissioners -- who approved the tanker sales last year and who are still in office -- to refrain from taking part in the board's ongoing investigation into the case.

"I've asked two commissioners to abstain from voting in the making of decisions by the board of commissioners on the case," he said, referring to Roes Ariawijaya and Iin Arifin Takhyan.

"This is to ensure a fair, objective and independent probe of the case by the board."

Roes is an expert advisor at the Office of the State Minister for State Enterprises while Iin is the Ministry of Energy and Mineral Resource's Director General of Oil and Gas.

The government asked Pertamina's board of commissioners to investigate the case following a ruling from the Business Competition Supervisory Commission (KPPU) that Pertamina and three of its three business partners colluded in the sale of two Very Large Crude Carriers (VLCCs) worth US$184 million last year.

As the market price of each tanker was between $120 million and US$150 million, the sales caused the state to lose at least $50 million.

The KPPU ordered the Pertamina boards of directors and commissioners to report their wrongdoings to the shareholders meeting and suspend Alfred.

It also ordered the three Pertamina partners -- Singapore- based financial advisor Goldman Sachs, Indonesian shipping firm PT Equinox, and the tender winner, Bermuda-based shipping firm Frontline Ltd -- to pay a total of $61.27 billion in fines to the state and Rp 180 billion ($19.4 million) in penalties.

Sugiharto said the government would continue its investigation but would wait for a Pertamina shareholders' meeting to review the board of directors' performance before making a decision on whether to replace any of the directors.

"If any of them are shown to be guilty in the case, they will be replaced immediately," he said.

"Legal prosecutions of the former members of the board of directors and commissioners will also be brought although we will wait for the full results of the investigation and respect the presumption of innocence."

Sugiharto denied allegations that the tanker sale case was in any way politically motivated.

"I took an oath upon taking over this office that I would not take sides -- apart from the state's -- in deciding on any affair," he said.

Separately, the former president director of Pertamina, Ariffi Nawawi, defended his decision to sell the tankers, saying it had been made for the sake of the company.

"We made the sales based on the highest bids and most credible buyer. Not one cent of the proceeds of the sales went into our pockets," he said.

Ariffi underlined that it was the board of directors's collective decision to sell the tankers and go through the procedures. "It was a pure business decision and all the procedures were within the board's knowledge."

Ariffi, Pertamina's former Director of General Affairs and Human Resources Eteng Asalam and former Director of Upstream Affairs Bambang Nugroho met on Monday to discuss the issue. They claimed it was their first meeting since being dismissed last year by then State Minister for State Enterprises Laksamana Sukardi.

However, they refused to comment on Alfred's suspension and Laksamana's role as the former Pertamina chief commissioners.

"We are certain that Pertamina will adopt a stance on the KPPU's decision," Ariffi said.

Pertamina President Director Widya Purnama said he had only learned of Alfred's suspension from the newspapers.

"We did not know about the decision, but we are prepared to appoint one of the other directors or myself to take over the position," he said during a hearing with the House of Representative's Commission VI on trade, investment and state- owned enterprises.