Pertamina to audit books under Baihaki

Pertamina to audit books under Baihaki

Johannes Simbolon, The Jakarta Post , Jakarta

State oil and gas company Pertamina is preparing to conduct a
forensic and investigative audit on past financial statements
amid suspicions that the last management led by Baihaki Hakim had
mishandled the company's finances.

Pertamina chief financial officer Alfred Rohimone told The
Jakarta Post on Tuesday that the audit was urged by the House of
Representatives Commission VIII overseeing mining and energy
affairs.

"We are selecting an independent auditor to carry out the
forensic and investigative audit," Alfred said, and that the
audit was expected to be finished by Aug. 30.

Commission VIII member Priyo Budi Santoso confirmed that it
had made the request in view of the recent change in Pertamina's
status into a limited liability company and because of the
financial difficulties the company faced.

The audit is to define clearly those assets belonging to
Pertamina and the government so they will not "easily change
hands", Priyo said.

In addition, the audit was expected to uncover Pertamina's
actual financial condition during Baihaki's leadership, as it is
suspected that the various problems it is now facing -- including
cash flow problems and the woes of its insurance arm Tugu Pratama
-- had ensued from mismanagement by the previous management, he
explained.

Priyo said the Commission made the request after Pertamina
unveiled its cash flow problem and before the media storm over
the firm's plan to sell its two giant tankers.

The Commission was particularly shocked at being informed that
Pertamina, under the previous management, owed about Rp 17
trillion to the government, he said.

"We are really disappointed, as Baihaki had always said
Pertamina was making a profit. He never said a word about the
debt," Priyo said.

Alfred recalled the current management -- which took over on
Sept. 17 -- was surprised when it read the company's books and
seeing the extent of its financial problem. He refused to provide
further details.

Despite the suspicions, Baihaki is still regarded as "clean",
and was recently nominated by the House for the Supreme Audit
Agency chairmanship.

Baihaki, a former president of U.S.-based ChevronTexaco's
subsidiary PT Caltex Pacific Indonesia, was appointed by former
president Abdurrahman Wahid in early 2000 to wipe Pertamina clean
of corruption.

When he was replaced in September 2003, views on his tenure
were split, with some believing he had performed well in carrying
out the anticorruption drive and others voicing concerns.

Baihaki had ordered the construction of the two Very Large
Crude Carriers that are being sold by the current management. The
sales has become a controversial issue and has drawn protests
from many who believe that corruption is behind it.

Pertamina has maintained that the vessels are being sold to
ease its cash flow problems.