Ex-Garuda chief given 8-year prison term for corruption, reports say

JAKARTA — The former president director of Garuda Indonesia, Emirsyah Satar has been found guilty of corruption while at the majority state-owned carrier and handed a prison term of eight years, the country’s corruption court ruled on Friday, according to local media Tempo.

Satar, who spent nine years as the head of Garuda between 2005 and 2014, was also fined 1 billion rupiah ($67,000), media said. He was convicted of receiving 46 billion rupiah worth of bribes from Soetikno Soedarjo, a local business person, in relation to the procurement of aircraft and aircraft engines. He also faces a further three months in prison if he cannot pay the fine, the report said.

In addition to the prison sentence, Satar was told to pay 2.1 million Singapore dollars ($1.5 million) in a “replacement fee,” meaning compensation for damages he is judged to have caused resulting from the corruption. Satar faces a further two years in prison if he fails to pay.

The former Garuda chief was named as a suspect by the country’s anti-graft agency in January 2017 and arrested in August last year in a multinational bribery scandal involving Rolls Royce. He was alleged to have received kickbacks through a middleman for engine procurement contracts for Airbus aircraft.

Satar said he will assess his options before deciding to accept the sentence or lodge an appeal, according to Tempo.

Garuda Indonesia declined to comment.

Satar was strumental in bringing Garuda’s runaway costs under control and oversaw its debut on Indonesia’s stock exchange. But his resignation began an era of turbulence for Garuda, which has seen three new president directors come and go within the space of five years.

The current occupant of the post, Irfan Setiaputra, who took charge in January, faces difficulties as the aviation industry takes a brutal hit from the coronavirus pandemic. Garuda’s operating revenue is set to fall by 33% in the first quarter of this year, according to a person familiar with the matter.

Garuda also faces a race against time to restructure $500 million worth of Islamic bonds due to mature next month.

The airline said in a statement to the country’s stock exchange last week that it will start “a process of open and constructive dialogue” with its bondholders via an agent.

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