Management of PT Smart Tbk - Photo by the Company

JAKARTA (TheInsiderStories) – After Lippo Group, now Corruption Eradication Commission (CEC) arrested the management of PT Smart Tbk (IDX: SMART), a subsidiary of Sinarmas Group, another conglomeration company in Indonesia.

According to vice chairman of CEC Saut Situmorang, the anti-graft body has been arrested 13 peoples on Friday (26/10) for alleged bribery to members of the Central Kalimantan’s Regional People’s Legislative Assembly members.

In the Friday’s raid, he said, at the Sinarmas building in Central Jakarta, the agency arrested vice president director of Smart, who also served as director of PT Binasawit Abadi Pratama (BAP) Edy Saputra Suradja, and three other officials. The officials tried to bribe parliament members worth Rp240 million (US$16,000).

Based on the CEC’s report, BAP has contributed to Sembuluh lake pollution amid the poor waste management practices. Its also suspected the BAP licensing has problems regarding the Right to Cultivate, the Borrowing Use of Forest Area and the guarantee of reserve for the area, because it is suspected that the oil palm land is located in a forest area.

According to Situmorang, the bribery purposed is to cover the issues from media.

Commenting on the case, its holding Singapore-based Golden Agri-Resources (GAR), stated following the formal announcement by CEC on Oct 27, the management of BAP wish to convey, as a law-abiding corporation.

“BAP is shocked by the allegations of bribery recently announced by CEC. BAP will co-operate fully with the CEC investigation. In addition, PT BAP will conduct its own internal investigation into the bribery allegations,” GAR said on Sunday (28/10).

In relation to allegations that BAP has contributed to the pollution of Lake Sembuluh due to poor waste management practices, the company disputes these allegations. BAP will undertake an independent audit of its waste management practices to verify that it is not the source of the pollution.

“While we undertake these investigations, and cooperate with the CEC, we wish to reassure our employees, customers, suppliers, creditors, and other key stakeholders that our business will continue to operate as normal,” said GAR.

BAP is engaged in the production of palm kernel oil. The company was founded in 1994 and based in Jakarta. While, Smart founded in 1962 and become a publicly-listed company at Indonesia Stock Exchange in 1992.

The company’s palm oil plantations cover more than 138,000 hectares (including smallholder farmers), and has primary activities cultivating and harvesting oil palms, processing fresh fruit bunches into crude palm oil, palm kernel, and refining CPO into value-added products such as cooking oil, margarine, shortening and oleo-chemicals, as well as merchandising palm products throughout the world.

Currently Smart operate 16 mills, 5 kernel crushing plants and 4 refineries, across Indonesia.