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Garuda smuggling scandal may just be the tip of a corruption iceberg

Jakarta Globe - December 8, 2019

Yustinus Paat, Fana Suparman, Jakarta – The smuggling fiasco at Garuda Indonesia continues with the flag carrier's board of commissioners taking the drastic action to suspend several of the state-owned company's directors who were implicated in the case at the weekend.

Garuda admitted last week that customs authorities had found boxes containing the disassembled parts of a vintage Harley Davidson motorcycle and two Brompton folding bicycles inside its brand new Airbus A330-900 Neo after it was delivered to Jakarta from its factory in Toulouse, France, in mid-November.

The police and the Corruption Eradication Commission (KPK) have been paying close attention to the case, suspecting the scandal was only the tip of the iceberg in an entrenched smuggling operation within the airline.

Sahala Lumban Gaol, the president commissioner of Garuda, announced at the weekend the board had decided to suspend several directors who were implicated in the smuggling case to allow the authorities free passage to conduct their investigation.

Sahala did not disclose the name of the directors who had been dismissed.

The Garuda board's action followed hot on the heels of State-Owned Enterprises Minister Erick Thohir's decision on Thursday to dismiss Garuda's chief executive I Gusti Ngurah Ashkara for allegedly ordering his subordinates to have the items brought into Indonesia illegally on the Airbus flight.

Garuda will conduct an extraordinary shareholders meeting as soon as possible to decide on the directors' fate and find a replacement for Ashkara. In the meantime, finance and risk director Fuad Rizal is acting as the airline's interim chief executive.

"All Garuda employees have been asked to continue their duties as usual," Sahala said.

The Transportation Ministry said in a separate statement that the authorities have taken steps to ensure that Garuda continues to operate normally.

The Jakarta Police said last week they were discussing with the Customs Office the possibility of a joint investigation into the smuggling case.

"Let's wait and see. Since the Customs Office had uncovered the case, they would be looking into it first," a police spokesman said.

Under Indonesian law, smugglers face up to ten years in jail or a fine of up to Rp 5 billion ($355,000).

Ferdy Hasiman, a researcher at think tank Alpha Research Database Indonesia, said the case may point to more conflicts of interest and corrupt business practices in Garuda.

"SOE Minister Erick Thohir should establish a team to audit all of Garuda's business practices," Ferdy said.

The KPK said it would be ready to investigate the smuggling case to see if it provided leads into other corruption or gratification cases in Garuda.

The anti-graft body is in the middle of investigating a bribery case that allegedly involved the airline's previous chief executive, Emirsyah Satar.

KPK spokesman Febri Diansyah said it could be the case that the Harley Davidson motorcycle and Brompton bicycles might be part of a kickback for the airline's directors.

"If [the motorcycle and bicycles were intended for] a state administrator thanks to his or her position, then that's an act gratuity. If it was more 'transactional,' given as kickback in exchange for a favor, then it could be regarded as a bribe," Febri said.

Source: https://jakartaglobe.id/business/garuda-smuggling-scandal-may-just-be-the-tip-of-a-corruption-iceberg