Six firms penalized in Indomobil share sale

Adianto P. Simamora, The Jakarta Post, Jakarta

Antimonopoly watchdog Business Competition Supervisory Commission (KPPU) said on Thursday that it had found irregularities in the sale of government shares in automaker PT Indomobil Sukses Internasional, and ruled that parties involved in the scandal including high profile names like brokerage firm PT Trimegah Securities and consulting firm PT Deloitte & Touche FAS pay penalties.

The commission also barred the two from being involved in the future sale of assets held by the Indonesian Bank Restructuring Agency (IBRA).

But the commission, which announced the results of its investigation into the case, did not recommend a cancellation of the transaction, saying that such a move would cause serious consequences to the state budget.

KPPU also asked the Attorney General's Office to launch an investigation into the possible involvement of IBRA officials in the scandal.

IBRA, the government agency tasked with managing assets (like the Indomobil stake) taken over from ailing banks and indebted bank owners, was led by I Putu Gede Ary Suta when the transaction occurred. The State Minister of State Enterprises Laksamana Sukardi replaced Ary Suta last month.

The Indomobil case centered on the sale of the government's 72.63 percent shares in the country's second largest carmaker late last year to a consortium called PT Cipta Sarana Duta Perkasa.

The consortium, led by Trimegah Securities, paid Rp 625 billion for the stake, which analysts say was very cheap compared to the value of the company of around Rp 2.14 trillion when it was transferred to IBRA in 1998.

Indomobil is part of assets surrendered by the giant Salim Group to IBRA to repay debts to the government. IBRA is tasked to sell the assets to raise cash to help finance the state budget deficit.

KPPU first launched the investigation amid allegations that the winning consortium was merely a proxy of the Salim Group set up to repurchase assets at a cheaper price. The government has banned the Salim Group from buying back its assets.

The suspicion that Salim was behind the consortium emerged because of the cheap selling price, and the hurried transaction process which seemed to be designed to prevent other bidders from making a proper assessment of Indomobil assets.

Trimegah and Ary Suta have denied these allegations.

"The (Rp 625 billion) price is too low, the country's potential loss reached Rp 288 billion (US$25.62 million) because of conspiracy," said KPPU official Syamsul Maarif.

KPPU said that some members of the winning consortium had conspired with related parties including IBRA officials, PT Holdiko Perkasa, a holding company set up by IBRA to hold assets pledged by Salim, and Deloitte & Touche to win the Indomobil stake at a very low price.

The commission said that this was against Article 22 of Antimonopoly Law No. 5/1999, which stipulates that businesses are prohibited from conspiring with other parties to win a tender.

KPPU is the agency established by the government to enforce this law.

KPPU ruled that Cipta Sarana pay a penalty of Rp 228 billion, while Trimegah was ordered to pay Rp 10.5 billion. Other consortium members and their executives ordered by the commission to pay penalties include PT Bhakti Asset Management, PT Alpha Sekuritas Indonesia, Pranata Hajadi and Jimmy Masrin.

KPPU, however, exempted consortium members PT Multi Megah Internasional and Singapore-based Parallax Capital Management Pte. Ltd from sanctions, saying that the two had not been proven to be involved in the conspiracy.

Meanwhile, Trimegah and Cipta Sarana rejected KPPU's findings.

"We are disappointed with KPPU's decision, we will file a complaint with the South Jakarta District Court," Simamora, a lawyer for Trimegah and Cipta Sarana told The Jakarta Post.

The parties are allowed to file a complaint with the district court about the KPPU findings within 14 days.