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JAKARTA
(JP):
The government said on Wednesday it would appoint
an independent auditor to review the controversial
US$350 million deal to sell oil palm plantations
to Malaysia's Kumpulan Guthrie Bhd. Finance
minister Prijadi Praptosuhardjo said that although
the government had concluded the deal with Guthrie,
a review remained necessary. "To call the deal
off wouldn't be ethical, so what's left is to
see whether the transaction is fair," Prijadi
told reporters on the sidelines of the two-day
G-15 summit at the Jakarta Convention Center.
He
said the government would report the audit result
to the Indonesian Bank Restructuring Agency's
(IBRA) oversight committee. However, Prijadi
fell short of explaining what the audit will
cover. In November last year, IBRA sold Guthrie
24 oil palm plantations -- formerly owned by
the Salim Group -- covering 260,000 hectares
in Sumatra, Kalimantan and Sulawesi. IBRA took
over Salim's plantation assets as collateral
for loans the group received from local banks
that were nationalized during the economic crisis.
"We'll ask for their (oversight committee's)
opinion on whether there is something wrong
with the deal," Prijadi went on. The oversight
committee, chaired by former finance minister
Mar'ie Mohammad, was formed last year to supervise
IBRA's decisions and provide the agency with
recommendations. However, the committee has
no power to annul IBRA's decisions.
Controversy
over the Guthrie deal arose last year when legislators
questioned the status of the land covering the
oil palm plantation area in Riau. The legislators
also criticized IBRA for having neglected the
social and political impact the deal could have
on Riau. They are demanding the government review
or even cancel the deal. The Riau plantations
were partly developed in cooperation with local
farmers under a nucleus farming scheme, which
allows the farmers, after certain years, to
own part of the plantation.
Guthrie
has promised the cooperation scheme applied
by the former owner with the farmers would continue
despite the change in management. Vice President
Megawati Soekarnoputri reportedly threw her
weight behind the legislators, saying the deal
should be reviewed. "The issue concerning Guthrie
comes down to two matters, first the transaction,
and second how to attend to the local farmers'
need," Prijadi explained. He added that another
issue was to negotiate with the farmers on the
community projects Guthrie could offer.
Nonetheless,
Guthrie's Group chief executive Abdul Khalid
Ibrahim last month dismissed the worries which
the upcoming audit might stir. According to
him, the review is being conducted to ensure
the sale is done properly. "It is good for Indonesia
and it's good for Guthrie...The review doesn't
mean anything to the arrangement (deal)," he
said. Khalid added his company had already assumed
management control of the Indonesian plantation
companies since March 31. (bkm)
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