The former chief executive of Garuda Indonesia, Emirsyah Satar, was found guilty yesterday by an Indonesian court for bribery and money laundering. He has been jailed for eight years for charges related to the procurement of planes and engines from Rolls Royce and Airbus.
Satar must pay fines or face more time in jail.
Satar, who spent nine years as the head of Garuda between 2005 -2014, was named as a suspect by Indonesia’s anti-graft agency in January 2017. He was arrested in August last year. This followed a two-year probe into the airline’s procurement of aircraft and engines between 2008 – 2013.
Indonesia’s Corruption Eradication Commission (KPK) indicated that Satar had received overpayments from a businessman for the acquisition of planes and engines by Garuda Indonesia. The bribes were accepted for the procurement of Rolls-Royce Trent 700 engines and Airbus A320 and A330 planes. Nikkei Asian Review reported that Satar received approximately $3 million (46 billion rupiahs) from local businessman Soetikno Soedarjo.
The indictment also related to the procurement of Airbus planes for PT Citilink Indonesia, a unit of Garuda.
Satar’s lawyer, Luhut Pangaribuan, said that the country’s corruption court had also fined his client $1.4 million (2 million Singapore dollars). It was reported that this money would be compensation for the damages that resulted from the corruption. Satar faces a further two years in prison if he fails to pay.
A multinational probe unearths corruption across several countries.
Corruption investigations across the globe unearthed schemes which spanned more than a decade and involved the bribery of officials in six countries.
In 2017, Rolls-Royce agreed to pay settlement charges totaling more than $800 million after an investigation by the US Department of Justice and Britain’s Serious Fraud Office (SFO). The countries involved included Thailand. The SFO reported that $18.8 million that had been paid by Rolls-Royce to regional intermediaries had ended up in the pockets of agents of the state of Thailand and employees of Thai airways.
Airbus also found themselves under investigation by authorities in Britain, France, and the US. The investigation concerned alleged bribery that stretched back over 15 years. They settled out of court, paying $4 billion in fines in February of this year.
Garuda faces further problems.
Since Satar resigned in 2014, Garuda has been through a turbulent time, going through three new president directors in the last five years.
The current president director, Irfan Setiaputra, has been in the post since January. He now faces the difficult task of navigating Garuda through the current difficulties caused by the COVID-19 pandemic.
As operating revenue is set to fall due to the standstill of flights, Garuda is in a race against time to restructure $500 million worth of Islamic bonds that are set to mature next month.
Do you think the charges bought against Satar will have any future impact on Garuda Indonesia? Let us know in the comments.