House alleges wrongdoing in Texmaco asset sales

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.