Indonesia’s investigation into payments made by Rolls-Royce and Airbus to the country’s state-owned airline Garuda Airlines is intensifying, with prosecutors examining eight former Garuda executives in as many days.
Indonesia’s Corruption Eradication Commission (KPK) questioned Hengki Heriandono, Garuda’s former vice president of investor relations, for over six hours on 15 February. It was the latest interview in the KPK’s investigation of bribes paid by intermediaries employed by UK engineering company Rolls-Royce and European aircraft manufacturer Airbus to former Garuda CEO Emirsyah Satar and a Singaporean sales consultant.
A spokesperson from the KPK confirmed Hengki is a witness in its investigation into whether Emirsyah received $2 million worth of goods from Rolls-Royce and unspecified bribes from Airbus. The KPK alleges Emirsyah received the bribes during his tenure as Garuda CEO – from 2005 to 2014 –and awarded the companies contracts to supply Garuda with 50 aircraft in return.
The KPK is also focusing on Soetikno Soedarjo, the owner of Singaporean brokerage company Connaught International, who allegedly facilitated the deals on behalf of Garuda. Soetikno allegedly received several million pounds from Rolls-Royce and a Silver Spirit Rolls-Royce car.
Soetikno hasn’t commented publicly on the investigation, while Emirsyah reportedly said in January 2017 that he is cooperating with the KPK investigation. An Airbus spokesperson told ALN's sister publication Global Investigations Review “We have seen [local] press reports but have had no official contact from the KPK.” A Rolls-Royce spokesperson declined to comment.
Hengki is the latest in a run of interviews conducted by the KPK this month. It began with the KPK questioning four former Garuda executives on 7 February, according to the Jakarta Globe. Prosecutors then interviewed Adrian Azhar, the former vice president of fleet acquisition for Garuda, and two other former Garuda executives on 13 February.
After interviewing Azhar, a KPK spokesperson made a statement about the progress of the investigation. “From the witnesses being examined, the investigators are still deepening related to the procurement process in Garuda Indonesia and the flow of funds to a number of parties,” the KPK spokesperson said.
The KPK has been investigating the alleged bribery since 2016 and said, in a January 2017 press release, that Soetikno and Emirsyah had been upgraded from witnesses to suspects.
The agency says it is working with the UK Serious Fraud Office (SFO) and Singapore’s Corrupt Practices Investigation Bureau (CPIB) in the investigation. A KPK spokesperson said on 13 February that the agency has had “intense communication” with both the SFO and CPIB.
Both the CPIB and the SFO refused to answer questions about whether they are assisting the KPK in its investigation. The CPIB also declined to comment on whether it is investigating Singaporean company Connaught International or Soetikno.
Rolls-Royce’s alleged bribery of Garuda and other Indonesia officials was covered in the £671 million settlement it reached with the SFO, US Department of Justice and Brazil’s Federal Prosecution Service (MPF) on 17 January 2017. However, the allegations within the settlement weren’t isolated to Indonesia, with the investigating agencies alleging Rolls-Royce bribed officials in multiple countries over a 20-year period.
The SFO alleges in its statement of facts from its part of the settlement, which saw Rolls-Royce pay £497 million to the UK, that the company bribed Indonesian officials from 1989 to 2006 and failed to prevent bribery in its civil aviation business in Indonesia between 2010 and 2013. The date from when Rolls-Royce allegedly failed to prevent bribes was dated from when the Act that created the offence, the UK Bribery Act 2010, came into effect.
Most of the alleged bribes cited were paid to Garuda officials. While officials aren’t identified by name or position in the statement of facts, the SFO alleges that bribes were paid to Garuda officials in “a range of senior positions, including at board level and across various Garuda departments”.
However, the KPK probe isn’t the only Rolls-Royce investigation linked to allegations covered in the 2017 settlement. Since 2015, Brazil’s Ministry of Transparency (CGU) has also been investigating whether Rolls-Royce paid bribes to officials at Brazil’s state-controlled oil company Petrobras.
Rolls-Royce paid US$25.5 million to the MPF as part of the 2017 settlement. The payment resolved allegations that Rolls-Royce paid US$1.6 million in bribes to Petrobras officials. It is common for companies to reach a settlement with the MPF while other Brazilian agencies continue to investigate the same or similar misconduct.
Together with French and US authorities, the SFO is also investigating whether Airbus bribed officials in Tunisia, Kazakhstan and China. Both the SFO and Airbus refused to answer questions about whether the three agencies are also investigating if Airbus bribed Indonesian officials as part of the probe.
The KPK did not respond to a request for comment.
Counsel to Rolls-Royce
For the SFO and DOJ investigations
Debevoise & Plimpton
Partners Karolos Seeger in London and Bruce Yannett in New York
Slaughter and May
Partners Richard Swallow, Jonathan Clark and Steve Cooke in London
For the MPF investigation
Partner Antenor Madruga in Brasilia
Counsel to Airbus
For the SFO investigation
Partner Neil Gerrard in London
For the PNF investigation
Partner Thomas Baudesson in Paris