KPPU to launch investigation on Indomobil sale
The Jakarta Post Jakarta
The Business Competition Supervisory Commission (KPPU) has announced plans to launch an investigation into the sale of government stakes in the country's second-largest automaker, PT Indomobil Sukses Internasional, next month amid allegations of fraud, officials said.
Commission Chairman Mohammad Iqbal said on Thursday that the investigation process could lead to either the cancellation of the deal, or a fine of between Rp 1 billion (or US$100,000) and Rp 25 billion against the buyer, a consortium led by PT Trimegah Securities, if there is proof that the law was broken.
Speaking to reporters on the sidelines of a hearing at the House of Representatives commission IX on state budget and finance, he added that the commission may also recommend that the House or the President dismiss any Indonesian Bank Restructuring Agency (IBRA) officials responsible for an illicit transaction, including chairman I Putu Gede Ary Suta.
"We have strong suspicions that there has been a violation of the law, so we'll launch a preliminary investigation starting on February 1, 2002," he told reporters.
He added that the initial stage of the investigation could take up to 30 days, and added that the conclusion of the investigation, in turn, could last up to 60 days.
According to Article 22 of Antimonopoly Law No. 5/1999, businesses are prohibited from conspiring with other parties to win a tender; this is underlined in the article as being an unfair business practice.
KPPU is the agency established by the government to enforce this law.
The government, via IBRA, sold more than 72 percent of its stake in Indomobil to the Tri Megah-led consortium in December.
But the hurried deal was roundly criticized by experts, particularly due to its low price and lack of transparency; this raised suspicions that company founder, the Salim Group, was behind the deal.
The IBRA only sold the shares at Rp 625 each, far lower than the Rp 2,500 per share that the government paid when it acquired the company in 1998.
Indomobil was part of the assets transferred by Salim to IBRA to repay debts to the government. Salim, however, has been banned from re-purchasing the publicly-owned company.
Reports also said earlier that IBRA officials had violated existing regulations in the sale process, as it had not sought the approval of the Financial Sector Policy Committee (FSPC), which groups top economic ministers.
The controversy surrounding the Indomobil sale only added to the various questionable asset sales and restructuring deals implemented by IBRA.
The Institute for Development of Economics and Finance (INDEF), a prominent independent think tank, earlier had even asked President Megawati to suspend Ary Suta from his post to facilitate the probe into the allegedly shoddy deals.