JAKARTA (TheInsiderStories) - State own enterprises (SOEs) minister, Erick Thohir announced, the national flight carrier, PT Garuda Indonesia Tbk (IDX: GIAA), plans to abort Bombardier CRJ-1000 leasing contract and would return 18 fleets to the lessors. A total of 12 will be returned to the Denmark-based company, Nordic Aviation Capital and six units to Export Development Canada.
“This decision related to the the Indonesian Corruption Eradication Commission and the UK (United Kingdom) Serious Fraud Office’ investigation into indications of bribery from the manufacturer to individual Garuda leaders during in 2011,” he told the media on Wednesday (02/10).
Recently, the British financial market criminal investigation agency, conducted an investigation regarding the alleged corruption of both parties regarding the order of the plane belonging to the Canadian manufacturer. The authority has intervened the Bombardier Inc.‘ Class B shares listed on the London Stock Exchange.
CEO of Garuda, Irfan Setiaputra, explained the deal with the lessors signed on February 2012 to lease six CRJ-1000 fleets with an option to take delivery of an additional 12 jets with total amount US$1.32 billion. The aviation company then took the first delivery of the Canadian-made regional jet in October 2012. Bombardier delivered its last CRJ-1000 in December 2015.
UK’ Serious Fraud Office confirmed its investigating plane producer, Bombardier, over suspected bribery and corruption in relation to contracts or orders from Garuda. The body wrote, “In accordance with best practices when such allegations come to our attention, we have launched an internal review conducted by external counsel and we are co-operating with the investigation opened by the UK Serious Fraud Office, which has contacted Bombardier further to the Indonesian judgements.”
Orders from the state-owned flight carrier for A330s and A320s orders had been among agreements probed during a long investigation into allegations of failure to prevent bribery focused on Airbus. Early of this year, Indonesia’ Corruption Eradication Commission announced that former CEO of the company, Emirsyah Satar, was convicted of corruption and money laundering, sentenced to a term of imprisonment and fined.
He was convicted of having received bribe payments from another individual for support in securing contracts for Bombardier, Airbus, ATR and Rolls-Royce. In 2012, he order for 18 CRJ1000s in 2012 and the airline remains an operator of the type.
End of last year, state own enterprises minister, Erick Thohir has dismissed CEO of Garuda, Ari Askhara, after getting more accurate data he involved in smuggling of Harley Davidson and Brompton from UK. He claimed to have valid evidence from the board of commissioners and audit committee and made sure the motorbike was owned by him.
“The purchase was made in April 2019. The payment process is through the finance manager in London. This is a comprehensive process across all SOEs. I am very sad when we want to develop SOEs, but if this happens, it will be in vain,” he told reporters on Dec. 5, 2019.
As a result of this lease cancellation, Garuda is required to pay an early termination fee and fulfill the technical conditions for aircraft redelivery. However, this offer was rejected by Nordic and the company unilaterally terminated the contract for the 12 aircraft.
Because of various problems, in the third quarter of this year, Garuda‘ revenue dropped by 67.70 percent from US43.54 billion to $1.14 billion. In detailed, the revenues from scheduled flights worth of $ 917.29 million, unscheduled flights of $46.92 million, and other income $174. 56 million.
In the quarter, the aviation firm received a foreign exchange gain of $83.35 million after booked an exchange loss of $13.91 million. At the same quarter, the operator recorded a net loss $1.07 billion from a year ago still generated a net profit of $122.42 million.
Written by Editorial Staff, Email: theinsiderstories@gmail.com
