Director admits setting up bogus company

JAKARTA (JP): A company director admitted to a court yesterday that he established bogus firms which were later implicated in a tax evasion case.

"I borrowed Sumarno's identification card to institute firms as ordered by my father," Dominikus Setia Ritaka, taking the witness stand in the trial of his father, Raden Ign. Suarisman, told the Central Jakarta district court.

According to Dominik, his father also installed him as a director of PT Sandang Tirta Bening Raya, whose activities and operations Dominik knew nothing about.

Dominik's testimony was not conducted under oath but suspect Suarisman did not have any objections to it.

Four businessmen including Suarisman are being tried for masterminding and establishing companies to publish bogus value- added tax invoices sold only at ten percent of their face-value between 1993 and 1995, thereby defrauding the government of Rp 58,3 billion.

The three other suspects, Hartono, Baharuddin Umar and Tony Effendy were being tried in two separate hearings on Tuesday.

"I never asked my father about anything he ordered me to do, I signed many blank VAT invoices and acted as a company director," Dominik timidly told the court, adding that he was paid Rp 250,000 every month.

Sumarno, also taking the witness stand, told the court that as he was allured by the seemingly easy Rp 500,000 a month fee acquired by allowing his name to be used by suspect Suarisman to establish a firm he knew nothing about for three months.

"My parent's address was used as the firm's address," Sumarno said.

The four suspects allegedly established a total of 31 bogus companies.

Six other witnesses, all entrepreneurs who bought the false value-added tax invoices, told the court that they had paid the full amount of the value-added tax as was written on the invoices.

The entrepreneurs were first notified that there had been problems with their VAT invoices following an audit by the Tax Directorate. All entrepreneurs testified that they did not know anything about the problematic VAT invoices until the notification. (14)