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Business, Politics

Ex-Garuda CEO arrested in corruption case that may also implicate politicians

He is suspected of violating money-laundering laws and will be detained for 20 days.


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Updated: August 9, 2019

Indonesia’s anti-corruption agency (KPK) has arrested Emirsyah Satar, the former head of the country’s national airline Garuda, on suspicion of money-laundering and bribery.

The allegations are centred on the procurement of Rolls-Royce aircraft engine parts and may even implicate politicians and government officials.

The KPK said 5.79 billion rupiah (S$568,000) was transferred to Emirsyah to pay for a house in Jakarta, with another US$680,000 ($940,000) and 1.02 million euros ($1.58million) sent to an account of a Singapore-based company owned by Emirsyah.

Another S$1.2 million was paid to him to pay off an apartment in Singapore.

The transfers were made by a consultant, believed to be a middle man, identified as Soetikno Soedarjo, who was a familiar face among Garuda employees.

Soetikno often appeared at numerous important functions that Garuda held during Emirsyah’s tenure from 2005 to 2014.

“The money given by Soetikno Soedarjo to Emirsyah… was not only from Rolls Royce, but also from other parties that won contracts from Garuda,” Laode Muhammad Syarif, a KPK commissioner, told a media briefing Wednesday night.

Soetikno received commission from Garuda’s suppliers, including Rolls Royce, which he in turn shared with Emirsyah and Hadinoto Soedigno, Garuda’s former technical and fleet management director, Mr Laode said, adding that the payments were called “prizes” for awarding contracts to the suppliers.

Mr Laode said Hadinoto received US$ 2.3 million and 477,000 euro in bank transfers from Soetikno which went to an account in Singapore.

Mr Emirsyah, who is now the chairman of MatahariMall.com, has been linked to a bribery case involving Rolls-Royce engines.

Lawyer for Emirsyah, Luhut Pangaribuan, told The Straits Times that the KPK found that several billions of rupiah were given to his client, adding that it had been returned to Soetikno.

“Emirsyah Satar admitted receiving gratitude money from SS, but all has been returned to him,” Mr Luhut said, referring to Soetikno Soedarjo.

“The gratitude money was a term coined by SS. The money did not at all affect a decision-making process (in awarding contracts to suppliers).”

Mr Luhut stressed that the money was given to Emirsyah Satar after decisions were made.

A government source told The Straits Times that Garuda’s losses were bigger than KPK indicated.

The government official, who spoke on condition of anonymity, said the mark-up was a staggering US$20 million for every Airbus plane with a Rolls Royce engine, adding that more than ten aircraft were delivered as a result of the agreements made during Emirsyah’s tenure.

Speaking to the ST, Mr Luhut dismissed these allegations.

The government source said Emirsyah could not have done this alone, adding that the money used to make such huge mark-ups possible must have been distributed to very senior politicians and government officials, claiming that the CEO of a state-owned company or Garuda’s board of directors would not be in a position high enough to facilitate such a big deal.



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