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)