PwC unit challenges KPPU ruling

PwC unit challenges KPPU ruling

Tony Hotland, Jakarta

Accounting firm Hadi Sutanto and Associates, the local unit of
U.S.-based PricewaterhouseCoopers (Pwc), challenged last month's
ruling by the Business Competition Supervisory Commission (KPPU)
against the firm.

The trial for the case started on Monday at the South Jakarta
District Court.

Harjon Sinaga, a lawyer representing Hadi Sutanto, said that
the KPPU had made a mistake by imposing a fine after stating that
his client had practiced unfair competition.

"(Public accountant) Eddy Pianto did not have the capacity to
audit Telkom's 2002 financial report because it did not have a
license from the SEC for the auditing purpose. So, there is no
such thing as unfair competition between accountants as our
client was listed and Eddy was not," he said on Monday.

Eddy Pianto was the former auditor of publicly listed
telecommunications company PT Telkom. The conflict started after
the U.S. Securities and Exchange Commission (SEC) rejected
Telkom's 2002 financial report because it was considered
incomplete, as Hadi Sutanto refused to issue a letter of consent
to Eddy to include in its audit report on PT Telkomsel, Telkom's
cellular subsidiary.

Telkom, whose shares are listed both in Jakarta and in New
York, later appointed Hadi Sutanto to reaudit its financial
report.

Hadi Sutanto had previously said that it refused to issue a
letter of consent because it feared the potential risk of being
implicated in the event of any mistakes made by Eddy.

Eddy then filed in March a request for the KPPU to examine the
matter. The KPPU declared Hadi Sutanto guilty last month and
imposed a Rp 20 billion (US$2.2 million) fine on the firm.

Harjon also said that the Indonesian Association of Public
Accountants and the Capital Market Supervisory Agency (Bapepam)
had even sent warning letters to Eddy's office for violating
accounting and business legislation.

KPPU lawyer David Tobing said that the KPPU had done its best
when reviewing the case and therefore regretted "the baseless
appeal."

Asked about the possibility of winning the case, David
believed that the judges were still neutral and could examine the
case objectively, although none of them had participated in
Supreme Court-sponsored training programs on business
legislation.

Previously, the KPPU won only one of 10 cases that were
appealed to the court. KPPU suspected that the court defeats were
due to the fact that judges presiding over the trials lacked
sufficient knowledge and background on business and antimonopoly
legislation.

"I wish there were special judges presiding over business-
related cases, as in the Administrative Court for bankruptcy
cases. Nevertheless, I still believe we have a chance (of winning
this case)," David said.