U.S. Markets open in 4 hrs 7 mins

Indonesia fines Garuda after CEO fired over smuggled Harley Davidson

Evidences of Harley Davidson and Brompton bicycle, which were brought into Indonesia on a new Airbus plane of PT Garuda Indonesia, are pictured before a news conference at Indonesian Finance Ministry in Jakarta

JAKARTA (Reuters) - Indonesia will fine flag carrier PT Garuda Indonesia for violating aviation rules after its chief executive was accused of smuggling a Harley Davidson motorbike onboard a new plane, state news agency Antara cited the transport minister as saying.

A day earlier, State-Owned Enterprises Minister Erick Thohir said CEO Ari Askhara would be dismissed over the allegations.

"We have send a letter to fine Garuda because it carried items without including them in the cargo list," Transportation Minister Budi Karya was quoted as saying on Friday.

He did not say how much the airline would be fined, but said that although the incident was not on a commercial flight, cargo must be listed, Antara reported.

Askhara is accused of trying to evade tax on a Harley Davidson motorcycle worth 800 million rupiah ($57,000) that was found on the plane. Two high-end bicycles were also discovered.

Askhara did not respond to multiple emails, text messages and phone calls seeking comment. A Garuda spokesman did not respond to several phone calls and text messages seeking comment.

Thohir said on Thursday that an initial investigation found a Garuda employee in Amsterdam helped pay for the motorbike and assisted in the delivery.

He said the State-Owned Enterprises Ministry would continue to investigate.

Chief financial officer Fuad Rizal will take over as acting chief executive of Garuda, SOE Ministry official Arya Sinulingga said on Friday.

"The acting CEO will be chosen internally so Garuda's operations can continue to run smoothly," he said.

Even in a country used to frequent graft cases, the story of the smuggled bikes has stirred intense public interest.

Flower arrangements supporting the actions of the SOE Ministry have even been sent to its offices in Jakarta.

"We support the SOE Minister in the firing of Garuda Indonesia's chief executive," a tag on one of the arrangements read.


(Reporting by Maikel Jefriando, Fransiska Nangoy and Jessica Damiana; Editing by Ed Davies and Gerry Doyle)