Indonesian Government to Summon Garuda’s Auditors and Directors Next Week
PT Garuda Indonesia Tbk (GIAA).

JAKARTA (TheInsiderStories) – Indonesian government through Transportation Minister Budi Karya Sumadi wrote to the airline PT Garuda Indonesia Tbk (IDX: GIAA) to immediately resolve the company’ internal chaos that occurred after the shareholders meeting. The chaos is feared to disrupt flight operations.

Previously, a letter circulating containing a strike action plan for Garuda Workers Union (SEKARGA) and Pilot Association (APG). The plan was related to the controversy over the results of the general meeting of the annual shareholders of the state-owned airline.

The Chief of SEKARGA, Ahmad Irfan, said the letter was made so that shareholders immediately resolve internal chaos by starting to communicate internally, not to fan out. This was very important, he rated, because the chaos actually made Garuda Indonesia’ shares hit and affected the trust of the airline’ customers.

The employees were also worried, the internal chaotic impact had an impact on the sustainability of the company which was where employees worked. Contacted separately, the President of APG, Bintang Hardiono, confirmed that the letter addressed to Chairul Tanjung was internal.

He said the substance of the letter was only limited to the plan. But the letter was leaked to the public. Therefore he stressed that the purpose of the letter was to request Tanjung as one of Garuda‘ shareholder resolve the internal problems.

Even the 2018’ financial results had been received at the shareholders meeting, two of its commissioners, Chairul Tanjung, and Dony Oskaria were rejected the report.

Tanjung is a representative of PT Trans Airways and Dony is a representative from Finegold Resources Ltd., which controls 28.08 percent of the flight carrier shares. The refusal of both is based on the Cooperation Agreement to Provide In-Flight Connectivity Services between PT Mahata Aero Teknologi and PT Citilink Indonesia on Oct. 31, 2018 and the amendments.

From the agreement, Garuda’ revenues from Mahata amounted to the US$239.94 million, with $28 million including profit sharing between Garuda and its partner PT Sriwijaya Air.

Based on last year’ financial report, the company recorded operating income of $4.37 billion and the current year’s profit was $5.02 million. Whereas previously the company still recorded a loss of $213.39 million in 2017.

The Commissioner considered that the company’ revenue from the Mahata agreement was $239.94 million, a significant amount. If without the recognition of this income the company will suffer a loss of $244.95 million.

“As for recognizing revenue from the Mahata agreement, the company posted a profit of $5,018,308,” Tanjung and Oskaria, Commissioners of the Company, wrote.

The impact of the recognition of revenue, the Garuda‘ financial statements for 2018 led to misleading, the material impact of which previously posted a significant loss into profit, especially the company is a public or open company.

There is enormous potential for a restatement of the 2018 financial statements of the company which can damage the company’s credibility. In addition, recognition of this income raises corporate tax obligations that should not be time yet. This can cause cashflow for the company.

Written by Lexy Nantu, Email: lexy@theinsiderstories.com