Eliminate corruption in SOEs

Jakarta, Indonesia, February 28, 2022 /PRNewswire/ — In October 2021former commissioner of Garuda Indonesia, Peter Ghonta, uncovered various problems brewing at the company.

Gontha asked the Department of State-Owned Enterprises (SOEs) to resolve previous cases of alleged corporate corruption related to aircraft leasing.

He cited issues related to powerful groups within the company and the price difference between leasing Boeing 777-300ER aircraft and buying CRJ1000 aircraft.

Ghonta spoke of reporting the issues to multiple institutions, from the director-general of the Justice and Human Rights Ministry to the chair of the Anti-Corruption Commission (KPK).

Minister for State-Owned Enterprises (SOEs). Eric Thohir then filed a complaint with the Attorney General’s Office for allegedly bribing the financially troubled state airline PT Garuda Indonesia (Persero).

The report outlines the government’s plan to restructure Garuda Indonesia and provides evidence of the procurement of ATR 72-600 aircraft.

We’re providing evidence from the investigative review, so it’s not an indictment, he said.

In the past two years, Garuda Indonesia has faced a financial storm due to past mismanagement, which has caused the company’s debt to soar to more than 140 trillion rupees, Thohir noted.

Meanwhile, Thohir noted that the Garuda Indonesia case was not just about an airplane, but an ecosystem.

He encouraged the solving of the Garuda Indonesia case, as it is impossible to buy or rent an airplane without a business plan and calculation of flight routes.

In the absence of such a calculation, Garuda ultimately paid the aircraft rental fee of up to 28 percent to the lessor, compared to just eight percent to other airlines’ aircraft lessors.

“Therefore, there is a system and a solution to prevent Garuda from repeating similar cases in the future, since the loss due to lack of management will also hit people in the form of expensive tickets,” he stressed.

In addition, the SOEs ministry has taken steps to restructure and rescue the state-owned airline.

The ministry will focus on transforming the airline to make it more accountable, professional and transparent.

More than 470 creditors have filed claims of up to $13.8 billionor equivalent Rp198 trillionto Garuda Indonesia January 5, 2022as part of a debt rewrite.

The figure was cited by Garuda Indonesia’s Suspension Debt Payment Obligation (PKPU) team, Thohir noted.

Upon completion of the review, the PKPU team will make a decision January 19, 2022in terms of the amount that is considered valid and can be included in the restructuring process, he noted.

The Garuda management had previously presented a proposal to reduce its liabilities by more than 60 percent $9.8 billion to $3.7 billion through restructuring.

The proposal aimed to help the company survive amid the COVID-19 pandemic that has been going on for two years.

Save Garuda

The Commission VI of the Indonesian House of Representatives formed a working committee to save the national airline Garuda Indonesia.

“In principle, the Garuda Rescue Committee is a follow-up to the three working meetings conducted by Commission VI with the SOE Minister, Deputy Ministers and the Garuda Indonesia Board,” explained Martin Manurung, Head of the Rescue Committee by Garuda.

Manurung explained that in addition to looking at management issues within the state-owned airline, the working committee will also consider options offered by the government.

Vice-Chairman of Commission VI said the formation of the Working Committee is also a form of political support for Commission VI of the Indonesian House of Representatives to keep Garuda Indonesia alive.

“We want Garuda Indonesia to be able to stay in the air as a national airline, to be able to fly as an airline with national pride,” Manurung noted.

Meanwhile, Minister of State-Owned Enterprises Eric Thohir expressed its support for the establishment of a working committee by the House of Representatives Committee VI (DPR RI) on the rescue and reform of the national airline Garuda Indonesia.

The establishment of the working committee is a testament to DPR RI’s concrete support and commitment in overseeing the state airline’s rejuvenation process, the minister noted.

The political support shown by lawmakers would be key to saving the national airline, the minister noted, adding that his ministry was committed to working with Parliament’s Working Committee to find solutions to problems affecting the national airline have plagued airline.

The ministry will also inform the working committee, which will oversee the airline’s restructuring and reform progress, about Garuda Indonesia’s future business and reform plan, he added.

The Ministry of State-Owned Enterprises cannot save the airline on its own, and we must work with relevant stakeholders, including Commission VI of DPR RI, to fix Garuda Indonesia, Thohir noted.

Garuda Indonesia’s transformation is a must to ensure the airline survives amid the economic uncertainty caused by the COVID-19 pandemic and to ensure it posts positive performance after the pandemic, he noted.

The ministry has also been working with the Attorney General’s Office to investigate past allegations of corruption by airline management, the state minister noted.

Thorough reforms in law enforcement and business aspects are expected to strengthen Garuda Indonesia’s performance to become more accountable, professional and transparent in the future, Thohir confirmed.

Jiwasraya, Pension Fund

Efforts are also being made in the insurance industry to root out corruption by the minister.

Thohir revealed that the closure of the Jiwasraya mega scandal provided a solution for the aggrieved parties.

“However, what sets us apart from other corruption cases is that the Jiwasraya case offers a solution to those who have been harmed. It’s not a pending case that has no explanation. Those who were harmed will be compensated for their losses,” Thohir said.

The minister pointed out that no solution had been found in several cases of corruption in pension funds and insurance companies. No refund was offered to the cheated parties.

For example, the case of illegal online lending where no perpetrators or masterminds have yet been uncovered and no refunds have been provided to the victims and cheated parties.

Thohir reiterated that cooperation is necessary to resolve the Jiwasraya case.

president Joko Widodo gave instructions that the Jiwasraya case should be resolved immediately.

After reviewing the facts and evidence, an audit investigation by the Development Finance Auditor (BPKP) and a report from the Supreme Audit Institution (BPK), the Ministry of State Enterprises officially reported the Jiwasraya case to the Attorney General’s Office.

“The Ministry of State-Owned Enterprises does not want to get into legal troubles and focuses on corporate issues,” the minister said.

In addition, Thohir will invest nationwide pension funds in state-owned companies before the end of this year.

The pension fund has become a breeding ground for corruption, and the pensioners’ bills are not paid in the end, he emphasized.

To this end, the Minister for SOEs called on the Commission VI of the Indonesian House of Representatives to conduct a joint focus group discussion on exposure to pension funds.

“We are ready, but we cannot clean it up immediately because there is a binding law. Therefore, the Ministry of State Enterprises cannot intervene,” Thohir noted.

Meanwhile, he noted that the comprehensive improvement of pension funds in the state-owned company in 2022 has become one of the SOE ministry’s programs.

The existence of state-owned companies aims to provide the state with the greatest possible profits.

After that, the profits are redirected back through various programs for the people, ranging from infrastructure development to wealth improvement and others.

There is no place for corruption within SOEs.

Accountability, transparency and anti-graft approaches must continue to be implemented to build prosperous state-owned companies.

SOURCE Ministry of State-Owned Enterprises

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