Two Former Pertamina Executives Sentenced to 4.5 and 3.5 Years in Prison
Two former Pertamina executives, Hari Karyuliarto, who served as Director of Gas at PT Pertamina from 2012 to 2014, and Yenni Andayani, Senior Vice President of Gas & Power at PT Pertamina from 2013 to 2014, have been found guilty in the alleged corruption case concerning the procurement of liquefied natural gas (LNG) at PT Pertamina from 2011 to 2021, which resulted in state losses amounting to US$113,839,186.60.
Hari and Yenni were deemed to have violated Article 3 of the Corruption Eradication Law (UU Tipikor) in conjunction with Article 55 paragraph 1 of the Criminal Code (KUHP) and Article 64 paragraph 1 of the KUHP, as stated in the second indictment.
“The defendants I, Hari Karyuliarto, and defendant II, Yenni Andayani, are proven legally and convincingly guilty of committing the criminal act of corruption jointly and continuously as charged in the second indictment by the Public Prosecutor,” stated the chief judge Suwandi while reading the verdict at the Central Jakarta Corruption Court on Monday (4/5).
Hari was sentenced to four years and six months in prison, along with a fine of Rp200 million, subsidiary to a replacement prison term of 80 days.
Meanwhile, Yenni was sentenced to three years and six months in prison, along with a fine of Rp200 million, subsidiary to a replacement prison term of 80 days.
“It is stipulated that the detention period already served by the defendants shall be fully deducted from the imposed sentence,” the judge said.
In delivering the verdict, the judge outlined several aggravating and mitigating circumstances.
The aggravating factor was that the defendants’ actions did not support the government’s programme in eradicating corruption offences.
The mitigating factors were that each defendant is over 60 years old and has no prior criminal record.
The sentence is lower than the KPK prosecutors’ demands, which sought six years and six months for Hari and five years and six months for Yenni.
Defendants’ actions
Hari failed to prepare guidelines for the LNG procurement process from Cheniere Energy Inc.; he approved the Term Sheet for Corpus Christi Liquefaction, which included a pricing formula, without considering the price that domestic buyers were willing to pay.
Hari also requested circular approval from the board of directors before signing the Corpus Christi Liquefaction Train 1 LNG Sales and Purchase Agreement without proposing to the board to seek written responses and shareholder approval.
He then approved the signing of the Corpus Christi Liquefaction Train 1 LNG Sales and Purchase Agreement without any binding LNG buyer; he did not prepare or attach an economic feasibility study, risk assessment and mitigation, nor attach a draft Sales and Purchase Agreement (SPA) in the memorandum requesting board approval for the decision to sign the Corpus Christi Liquefaction Train 1 LNG Sales and Purchase Agreement.
Hari also conducted discussions with Cheniere Energy Inc. regarding plans to add Corpus Christi Liquefaction LNG as early as March 2014, based on projections rather than on buyers who had signed agreements.
Furthermore, Hari approved a higher pricing formula for Train 2 without a risk study or economic analysis to ensure that the Corpus Christi Liquefaction Train 2 LNG price was competitive compared to LNG prices from domestic sources or other sources using crude oil prices.
Hari proposed to Karen Agustiawan (former President Director of Pertamina) to sign a power of attorney addressed to him for signing the LNG SPA Train 2, without board approval, written responses from the board of commissioners, and shareholder approval, and without any binding Corpus Christi Liquefaction LNG buyer via agreement.
He also signed the LNG SPA Train 2 without board approval, written responses from the board of commissioners, and shareholder approval, as well as without any binding Corpus Christi Liquefaction LNG buyer via agreement.
Meanwhile, Yenni proposed to Hari the signing of the Circular Board of Directors’ Minutes regarding the Decision on the Signing of the Corpus Christi Liquefaction Train 1 and Train 2 LNG Sales and Purchase Agreement without supporting economic feasibility studies, risks, and mitigation in the Corpus Christi Liquefaction LNG procurement process, and without a binding Corpus Christi Liquefaction LNG buyer via agreement.
Yenni signed the Train 1 LNG Purchase SPA between PT Pertamina and Corpus Christi Liquefaction on 4 December 2013 based on a power of attorney from Karen Agustiawan, even though not all Pertamina directors had signed the Board of Directors’ Minutes, and without written responses from Pertamina’s board of commissioners and shareholder approval, as well as without any binding Corpus Christi Liquefaction LNG buyer via agreement.