Govt to appoint auditor to review Guthrie deal
Govt to appoint auditor to review Guthrie deal
JAKARTA (JP): The government said on Wednesday it would
appoint an independent auditor to review the controversial US$350
million deal to sell oil palm plantations to Malaysia's Kumpulan
Guthrie Bhd.
Finance minister Prijadi Praptosuhardjo said that although the
government had concluded the deal with Guthrie, a review remained
necessary.
"To call the deal off wouldn't be ethical, so what's left is
to see whether the transaction is fair," Prijadi told reporters
on the sidelines of the two-day G-15 summit at the Jakarta
Convention Center.
He said the government would report the audit result to the
Indonesian Bank Restructuring Agency's (IBRA) oversight
committee. However, Prijadi fell short of explaining what the
audit will cover.
In November last year, IBRA sold Guthrie 24 oil palm
plantations -- formerly owned by the Salim Group -- covering
260,000 hectares in Sumatra, Kalimantan and Sulawesi.
IBRA took over Salim's plantation assets as collateral for
loans the group received from local banks that were nationalized
during the economic crisis.
"We'll ask for their (oversight committee's) opinion on
whether there is something wrong with the deal," Prijadi went on.
The oversight committee, chaired by former finance minister
Mar'ie Mohammad, was formed last year to supervise IBRA's
decisions and provide the agency with recommendations.
However, the committee has no power to annul IBRA's decisions.
Controversy over the Guthrie deal arose last year when
legislators questioned the status of the land covering the oil
palm plantation area in Riau.
The legislators also criticized IBRA for having neglected the
social and political impact the deal could have on Riau. They are
demanding the government review or even cancel the deal.
The Riau plantations were partly developed in cooperation with
local farmers under a nucleus farming scheme, which allows the
farmers, after certain years, to own part of the plantation.
Guthrie has promised the cooperation scheme applied by the
former owner with the farmers would continue despite the change
in management.
Vice President Megawati Soekarnoputri reportedly threw her
weight behind the legislators, saying the deal should be
reviewed.
"The issue concerning Guthrie comes down to two matters, first
the transaction, and second how to attend to the local farmers'
need," Prijadi explained. He added that another issue was to
negotiate with the farmers on the community projects Guthrie
could offer.
Nonetheless, Guthrie's Group chief executive Abdul Khalid
Ibrahim last month dismissed the worries which the upcoming audit
might stir.
According to him, the review is being conducted to ensure the
sale is done properly. "It is good for Indonesia and it's good
for Guthrie...The review doesn't mean anything to the arrangement
(deal)," he said.
Khalid added his company had already assumed management
control of the Indonesian plantation companies since March 31.
(bkm)