Inkud complains it overpaid for Goro chain deal

Inkud complains it overpaid for Goro chain deal

JAKARTA (JP): The Confederation of Primary Cooperatives'
Association (Inkud) paid far too much to take over the wholesale
chain Goro from companies linked to former president Soeharto's
children, an association executive said yesterday.

Speaking at a hearing at the House of Representatives, Inkud's
newly appointed president Nurdin Halid said that the Rp 140
billion (US$9.3 million) deal was almost twice what Goro's total
assets were worth.

He, however, said that Inkud, which groups associations of
thousands of cooperatives across the country, had no plans to
annul the deal.

"We only want the former shareholders to review the deal and
cut the price for us," he told House Commission V for industry,
mining, trade, manpower, cooperatives and the environment.

On May 4, Inkud agreed to take over the wholesale firm from
its two shareholders PT Goro Batara Sakti (GBS) and PT Goro
Yudisttira Utama (GYU), which respectively owned 55 percent and
45 percent of Goro.

GBS was 80 percent owned by Tommy's Humpuss Group and 20
percent by Ricardo Gelael while GYU was owned 75 percent by
Humpuss and 25 percent by Inkud.

Under the terms of the takeover deal, Inkud paid about Rp 76
billion of the total transaction while the remainder was to be
paid after a due diligence assessment.

Nurdin told the House members that the Rp 76 billion was to
pay for the company's goodwill or intangible assets while the
other Rp 64 billion was for fixed assets and networks.

He, however, said the audit taken during the due diligence
indicated that the wholesaler's assets were valued at only about
Rp 76 billion.

Last month's riots and looting which hit two of Goro's outlets
caused a decline in the fixed assets to Rp 50 billion.

Nurdin said he had therefore appealed to the former
shareholders to cut the price to Rp 50 billion from Rp 140
billion.

"It means that Inkud is no longer required to pay the Rp 64
billion as stipulated in the contract. But Goro must instead
return Rp 26 billion from the first Rp 76 billion payment," he
told the House members.

Goro, established in 1995, has three wholesale outlets in
Kelapa Gading, North Jakarta, Pasar Minggu, South Jakarta and in
Pekayon, Bekasi, West Java.

Its Pasar Minggu outlet was looted and burned and its Pekayon
outlet was looted in the two days of massive looting, rioting and
arson in Jakarta in mid-May.

Nurdin acknowledged yesterday that Goro's acquisition was
finalized in a hurry but he denied that it was made under
pressure.

"It was purely business although it was negotiated in just 20
days. Inkud took over Goro because the government said Goro was
considered monopolistic by the IMF and should be taken over by
Inkud," he said.

Its monopoly involved helping the State Logistics Agency
(Bulog) distribute nonedible basic essentials.

Nurdin added that the decision was taken to help the
government meet the criteria to receive its bail-out funds from
the International Monetary Fund (IMF).

Inkud's chairman, H.M Rapi'i, said that Inkud, Goro's new
owner, had asked Bulog to give it the land on which its Kelapa
Gading outlet is located. The land still belongs to the state as
a result of Goro's previous owners failing to keep their side of
an agreement with the agency.

In October 1996 Goro swapped its 75-hectare Marunda site for
the 50-hectare plot in Kelapa Gading where Bulog operated a
270,000-metric ton capacity warehouse.

Under the deal, Goro was required to build a 450,000-ton
warehouse on the Marunda site. It failed to meet this obligation,
but nevertheless went on to construct a sales outlet on eight
hectares of the Kelapa Gading site.

Bulog chairman Beddu Amang said earlier this month that the
agency had offered to lease four hectares of the disputed land to
Goro and take the remaining four hectares back under its
control. (gis)