Indonesian Political, Business & Finance News

Merpati's chief Ridwan replaced by Budiarto

Merpati's chief Ridwan replaced by Budiarto

JAKARTA (JP): PT Merpati Nusantara's president Ridwan
Fataruddin, as widely predicted, was replaced yesterday by
Budiarto Subroto, formerly the commercial director of the airline
and an assistant to Minister of Transportation Haryanto
Dhanutirto.

Budiarto was installed together with the other members of the
new Merpati board of directors by Soepandi, the chief
commissioner of Merpati.

"The replacement of officials is a natural event within an
organization and is in fact part of the dynamic process within a
corporate entity," Soepandi noted, apparently in an attempt to
stop the controversy which has preceded Ridwan's sacking.

Only one member of the old board of directors -- Technical
Director Mulyono -- was reappointed. The other directors
installed yesterday are Ishak Sumawuriah, the new financial
director replacing Sjarifuddin Iteroeddin, Agus R.S. Santoso the
commercial director replacing Budiarto Subroto, and Prasetyo
Wisaksono Sambodo the operations director replacing Amin Kahar.

Both Ridwan and Sjarifuddin did not attend the installation
ceremony at the Garuda headquarters building.

"This replacement was prepared in August," insisted Soepandi,
who is also president of Garuda, the national flag carrier and
Merpati's mother company.

He flatly denied that Ridwan's dismissal was related to his
widely-publicized refusal to lease 16 CN-235 aircraft from PT
Arthasaka Nusaphala, which is owned jointly by the Bakrie and
Humpuss groups.

"We are still negotiating with them (Arthasaka) and we are
optimistic about concluding a mutually beneficial deal," Soepandi
said.

Speculation about Ridwan's replacement ran rampant following
his statement two weeks ago that the airline would not lease the
16 CN-235-200 aircraft because the leasing fee, US$110,000 per
unit a month, was commercially unfeasible.

His sacking became certain after Minister Haryanto disclosed,
through Air Transport Director General Zainuddin Sikado early
this week, that the finance minister, as the nominee government
shareholder in state companies, had approved Ridwan's
replacement.

Sikado said Ridwan was being replaced partly because he
allegedly violated procedures during the construction of the new
Merpati headquarters in Jakarta.

Ridwan, however, immediately rebutted Sikado's remarks,
outlining the procedures which had been fulfilled before the
project was finally approved by M. Soeparno, the chief
commissioner of Merpati at that time. The building project was
approved 17 months before Ridwan was appointed Merpati's
president in August 1992.

Soepandi said Merpati, as a state company, has a double
function: As a commercial entity, it must be managed
professionally and efficiently with sound business senses, but as
a state company it is responsible for supporting the government's
programs.

Earlier on Thursday, several newspapers leaked the contents of
a letter from the chief of the Government Audit Agency to the
ministers of finance and transportation dated Sept. 12, 1995. It
disclosed that Merpati had lost money operating the eight Fokker-
28s it leased from Arthasaka.

Arthasaka is the same private company which may lease to
Merpati the 16 CN-235 planes it bought from the state-owned IPTN
aerospace company in Bandung.

IPTN is chaired by State Minister of Research and Technology
B.J. Habibie, the tireless champion of high-tech industry in
Indonesia.

The government's chief auditor strongly urged the two
ministers to terminate Merpati's lease contract or change its
terms. Otherwise, Merpati would lose Rp 20.78 billion (US$9.2
million) a year from operating the Fokker-28s, it said.

Soepandi declined to comment on the audit agency's findings,
saying he had yet to study the auditors' report.

Two of the new Merpati directors installed yesterday are
former officials of the Ministry of Transportation. (04/vin)

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