Emirsyah Satar, Soetikno Soedardjo Named in Rolls Royce Scandal
After Emirsyah Satar, Indonesia's Corruption Eradication Commission (KPK) has also named Soetikno Soedardjo a suspect in the same multinational bribery case. On Thursday (19/01) it became breaking headline news in Indonesia when the KPK announced that former Garuda Indonesia Chief Executive (2005-2014) Emirsyah Satar was named suspect of received a bribe in the procurement (by Garuda Indonesia) of aircraft and aircraft engines from Airbus and Rolls-Royce. Satar currently servers as Chairman of Indonesian conglomerate Lippo Group's e-commerce platform MatahariMall.com.
The other suspect is Soetikno Soedardjo, founder of media, lifestyle and entertainment company Mugi Rekso Abadi (MRA Group) and owner of Connaught International Pte Ltd. He allegedly gave 1.2 million euro, USD $180,000 in cash, and USD $2 million worth of assets in Singapore and Indonesia - in kickbacks for engine procurement contracts for Airbus aircraft - to Satar. The KPK says Soedardjo was used as middleman in this scandal.
The case is not confined to Indonesia. Rolls Royce has admitted to paying bribes to middlemen in order to secure orders in China, India, Indonesia, Nigeria, Russia, and Thailand. The leadership of Rolls Royce was aware about corruption allegations within the company as early as 2010 but decided not to inform UK's Serious Fraud Office (SFO).
In 2015 the SFO launched an investigation into suspected fraud, bribery and corruption in some Airbus airplane sales, following discrepancies found during an internal company audit.
Earlier this week it was announced that Rolls Royce is to pay £671 million in penalties to settle long-running corruption allegations. In a statement read out in court the multinational manufacturer apologized unreservedly for the conduct which has been uncovered.
In Indonesia, Rolls-Royce admitted giving USD $2.25 million and a Rolls-Royce Silver Spirit car to an individual (possibly to middleman Soetikno Soedardjo) in exchange for a “favor to Rolls-Royce on a contract” for Trent aero engines to be provided to Indonesian national flag carrier Garuda Indonesia. Separately, Rolls-Royce paid a representative from a rival bidder to submit an uncompetitive bid on a contract Rolls-Royce successfully secured. The bribes were allegedly paid between July 2011 and March 2012.
Documents show that these bribes also occurred between 1989 and 1998 during former President Suharto's New Order regime for the procurement of Trent 700 engines for six A330 aircraft.
In 2015 Rolls Royce won another contract from Garuda Indonesia, a deal worth USD $1.2 billion, for Trent 700 engines and TotalCare support. The engines were purchased to power Garuda Indonesia's 14 A330neo aircraft. The signing ceremony for this deal was witnessed by Indonesian President Joko Widodo and former UK Prime Minister David Cameron in London, April 2015. However, there are no indications that bribes were used to influence this deal.
Read more: Overview and Analysis of Corruption in Indonesia