Telkom denies forensic audit results
Tantri Yuliandini, The Jakarta Post, Jakarta
State-owned telco PT Telkom denied on Wednesday ever having giving authorization for PriceWaterhouseCoopers (PwC) to launch a forensic audit of the telecommunications regions of West Java and Banten following the alleged misappropriation of billions of rupiah due to mismanagement.
Telkom said that although it and its joint operation (KSO) partner AriaWest International had appointed PwC to conduct the forensic audit, they had never discussed the schedule and scope of the forensic audit.
Therefore, the findings of the PwC audit were "invalid" and that the audit results were "not reliable".
"Telkom has numerous objections to the audit. It was not independent. It was flawed. Telkom was cut out of the process," Telkom's director of operations and marketing Komarudin Sastrakoesoemah said in a statement.
Earlier, the Koran Tempo daily reported that PwC had found that between Rp 600 billion (about US$59 million) and Rp 700 billion in revenue had gone missing from the telecommunications regions operated by AriaWest.
The telecommunications regions of West Java and Banten were given to AriaWest to manage in 1996 under a joint operation (KSO) agreement with Telkom.
The collaborative venture backfired when the lucrative business no longer looked profitable on the back of the economic crisis in late 1997, and the relationship between the two companies began to sour.
In March this year, AriaWest released a preliminary report on the PwC audit which indicated problems with fraud and mismanagement on the part of Telkom employees in the West Java and Banten regions.
This report was also denied by Telkom at the time for the same reason, namely that the forensic audit had not been authorized.
Komarudin said that Telkom had submitted its objections to the audit to the International Chamber of Commerce (ICC) in Geneva, and that it had appointed its own accounting firm to review the results of the PwC audit and to conduct its own forensic audit of the telecoms regions.