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.