GARUDA TOLD TO FIX, RESTATE 2018 RESULTS
Indonesian regulators also impose fines on airline, directors
REGULATORS have ordered national flag carrier Garuda to “fix and restate” its 2018 financial results over accounting errors within two weeks, and said they would also impose fines on the airline and its directors.
The financial regulator, OJK, said Garuda and its directors would each be fined 100 million rupiah (RM29,302.92), in addition to another collective sanction that would be imposed on directors and commissioners who had signed off on the results.
Garuda’s shares fell as much as seven per cent to hit their lowest since January after the news, and
came under further pressure as the Indonesia Stock Exchange (IDX) asked the airline to restate its first-quarter results as well.
IDX said it would impose a 250 million rupiah fine on Garuda over alleged errors in results.
The carrier said it disagreed with the regulators’ assessment and would need to re-examine the results.
While it was not clear what accounting errors the regulators and IDX were referring to, two of Garuda’s largest private shareholders had in April questioned the airline’s 2018 results and alleged it misrepresented a US$240 million (RM993.6 million) financial transaction — a claim the airline rejected.
CT Corp and Finegold Resources Ltd, which own a total 28 per cent of Garuda shares, said they had refused to sign the earnings report over the “misleading” way it portrayed an October deal.
Garuda, majority-owned by the government, in its financial report for last year indicated a modest profit of US$809,850, after struggling with fuel costs and a firmer rupiah.
But the shareholders believe Garuda should actually be listing an additional loss of US$240 million that it was still owed by PT Mahata Aero Teknologi.
It had forward-booked this revenue from Mahata in its 2018 earnings.