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Indonesia Detains Former Garuda CEO in Corruption Probe

Harry Suhartono and Tassia Sipahutar

(Bloomberg) -- Indonesia’s anti-corruption agency detained Emirsyah Satar, the former head of PT Garuda Indonesia, as part of a long-running probe into suspected corruption involving the procurement of aircraft and engines.

Satar is suspected of money laundering and will be held for 20 days, the agency said in a statement. It also detained an Indonesian businessman for the same suspected violation.

Satar was given cash and other gifts by the man, who received commissions from manufacturers, the agency alleged. While acknowledging that he received money, Satar denies any money-laundering allegations as he thought the funds were merely a form of gratitude, his lawyer Luhut Pangaribuan said.

“After the investigation started, he realized that as a state employee he should not have received anything, so he returned the money,” Pangaribuan said in a text message.

The probe relates to Garuda’s procurement of Airbus SE A330 and A320 jets, ATR 72-600 turboprops, Bombardier Inc. CRJ 1000 regional aircraft and Rolls-Royce Holdings Plc engines when Satar led the state-owned airline, according to the anti-corruption agency. The organization is known in Indonesia as KPK, short for Komisi Pemberantasan Korupsi.

Satar has been credited by analysts for helping to revive the carrier when he was CEO and president director from 2005 through 2014.

Indonesia Names Ex-Garuda CEO as Suspect in Corruption Case (2)

KPK said it has confiscated a house in Jakarta, while authorities in Singapore seized an apartment and blocked various bank accounts of Satar in the city state. The Indonesian agency also suspects the involvement of several foreign manufacturers in the case and said it is open to cooperation with various authorities abroad.

KPK spokesman Febri Diansyah didn’t reply to text messages asking if Airbus, Rolls-Royce, Bombardier and ATR are being investigated. Calls to his mobile phone weren’t answered.

A spokesman for Airbus said the company is unable to comment on pending investigations. A Rolls-Royce spokesman said: “We note the announcement from KPK about legal proceedings, in which we are not involved, against a number of individuals and will not be commenting further.”

A representative for ATR, short for Avions de Transport Régional, had no immediate comment, while spokespeople for Bombardier couldn’t be reached.

(Adds responses from manufacturers starting in the ninth paragraph.)

--With assistance from Christopher Jasper and Benjamin Katz.

To contact the reporters on this story: Harry Suhartono in Jakarta at hsuhartono@bloomberg.net;Tassia Sipahutar in Jakarta at ssipahutar@bloomberg.net

To contact the editors responsible for this story: Young-Sam Cho at ycho2@bloomberg.net, Ville Heiskanen, Angus Whitley

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