JAKARTA (TheInsiderStories) – After finding irregularities in the annual financial statements of PT Garuda Indonesia Tbk (IDX:GIAA) in 2018, Ministry of Finance, Supreme Audit Agency and Indonesia Stock Exchange (IDX) planned to summon auditors and directors of the state-owned airlines.
The summons was not solely to see clearly the cases that caused public rumors, but also wanted to deepen the ethics and accountability standards of the cooperation contract between PT Citilink Indonesia and PT Mahata Aero Teknologi, which was approved on Dec. 26, 2018.
IDX management assessed the irregularities in the 2018′ Garuda Indonesia financial report. According to Corporate Valuation Director I Gede Nyoman Yetna, the bourse had sent a letter to call the flight carrier management and public accountants who audited the company’ financial statements.
“We have already studied the financial and regulatory reports. Tuesday next week, we will call the directors and the public accountants because the directors have the right to explain,” he said on Friday (04/26).
The Supreme Audit Agency also to summon Tanubrata Sutanto Fahmi Bambang & Partners Public Accountant, who conducted an audit of the company’ financial report, according to an officials on Thursday (04/25). More than that, the agency will likely intervene and conduct a special audit to find out more details about the irregularities.
The irregularities in the GIAA’ financial report were revealed after two major shareholders Chairal Tanjung and Doni Oskaria refused to sign the 2018′ financial report. The reasoned, there was a form of engineering by the state company to enter the cooperation contract clause with Mahata as revenue, even though the payment was unclear.
According to the agreement, Garuda Indonesia carries out and covers all costs of providing, implementing, installing, operating, maintaining or dismantling and maintaining, replacing connectivity and in-flight entertainment equipment, and content management.
Mahata then had to pay compensation for the installation rights of in-flight connectivity services on 153 Garuda’s aircraft for $131.94 million plus a compensation fee of $80 million for the management of in-flight entertainment services and content management for 99 Garuda planes after the agreement was signed.
However, until the end of 2018 no payment has been made from Mahata, even though a unit of equipment has been installed at Citilink. However, Garuda recorded a contract value in the financial statements that made Garuda’s profit performance of $5,018,308 in 2018, which should have lost $244,958,308.
As a result, GIAA shares also dropped almost 8 percent on Thursday. Based on trade data, the GIAA stock price fell 7.6 percent to the level of Rp462/unit. The trading volume of shares was recorded at 53.97 million worth Rp25.71 billion.
Previously, the company reported that the company posted a net profit of $809,846 in 2018, equivalent to Rp11.49 billion. This condition is inversely proportional to the same condition in the previous year which lost $216,582,416. This net profit was recorded when the company recorded a slowdown in revenue.
Total income in 2018 only rose 4.69 percent year-on-year (y-o-y) to $4.37 billion, compared to 2017’s achievement of $4.18 billion.
In fact, in 2017, Garuda Indonesia revenue grew 8.11 percent compared to 2016 revenue. With that, the company should have lost operations because the total operating expenses booked by the company last year reached $4.58 billion, aka $206.08 million more than the revenue recorded in in 2018.
Strangely, in its financial statements, financial performance was saved by compensation income for installation rights for aircraft in-service connectivity and entertainment equipment and content management in the amount of $239.94 million (around Rp2.9 trillion), which is not in the 2017 financial statements and has not confirmed payment.
Written by Daniel Deha, Email: firstname.lastname@example.org