Two companies fined in illegal sugar auction
The Jakarta Post, Jakarta
The Business Competition Supervisory Commission (KPPU) ordered two companies to pay Rp 1 billion (US$98,232) each in fines on Monday after it found that they colluded in an auction of illegally imported Thai sugar.
The commission also banned them from joining in similar auctions in the next two years.
KPPU ruled that sugar refining companies PT Angels Products (AP) and PT Bina Muda Perkasa (BMP) were guilty of colluding in the auction of over 56,000 tons of sugar illegally imported from Thailand, which was confiscated by the North Jakarta Prosecutors' Office last year.
The prosecutors' office auctioned the sugar on Jan. 4 and AP won the bidding at a price of Rp 118 billion.
"The auction hampered healthy business competition because, first, the committee announced the auction plan only at one local media Harian Jakarta and second, it only gave two working days to participating companies to fulfill all the requirements to join the auction, including the payment of Rp 50 billion in collateral," said KPPU chairman Syamsul Maarif.
"This indicates that the committee intentionally arranged the auction so that only the two companies would participate."
KPPU also ruled that Sukamto Effendy, a businessman believed to have links with both companies, had to pay Rp 1 billion in fines.
"He was present at the auction on behalf of BMP, but our investigators found that he also had business ties with AP. It means Sukamto participated in the auction through both firms. No real competition took place during the auction," Syamsul stated as he read the ruling.
The commission also urged the Attorney General's Office to probe the auction's project officer Susanto for his role in arranging the collusion.
According to the ruling, the auction violates Article 22 of Law No. 5/1999 on Anti Monopoly Practices and Unfair Business Competition. The law stipulates that an auction should be announced within six working days in a number of national media to achieve optimum prices of auctions or tenders.
Syamsul said the commission's investigators also found that BMP should have not participated in the auction as it only had a working capital of Rp 100 million with one director and one commissioner and no employees. It never carried out any sugar refining activities during the last two years either, as required in the auction.
"Our investigators also found that BMP's office was housed at its director's residence. These facts show that the company had no competence in participating in the auction," KPPU member Soy M. Pardede said, adding that it was obvious that the auction was arranged to let PT AP win.
Rico Pandeirot, a legal representative of AP, BMP and Sukamto, said his clients would soon appeal the ruling.
"If the process of the auction violated the regulation, my clients should not be held responsible because they had fulfilled all the requirements to participate in the auction," he said. (006)