Indonesia to fire Garuda CEO over Harley-Davidson smuggling accusation

Indonesian airline Garuda Indonesia is firing its chief executive over allegations he ordered a classic Harley-Davidson motorcycle to be smuggled into the country on a brand new Airbus jet.

I Gusti Ngurah Askhara Danadiputra will be dismissed after the airline’s audit committee found he had ordered the purchase of the classic Harley Shovelhead, State-Owned Enterprises Minister Erick Thohir said. The Garuda CEO, who is also known as Ari Askhara, gave instructions to find the motorcycle and the purchase was made in April through a transfer via a personal account of Garuda’s finance manager in Amsterdam, Thohir said.

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His comments come days after customs officials found the motorcycle worth 800 million rupiah (US$57,000) and two high-end Brompton folding bikes in the cargo hold of a new Airbus A330neo being delivered from France. The jet is one of 14 A330neo planes ordered by the airline that will be delivered gradually until 2022.

The manifest of the ferry flight from Toulouse to Jakarta showed the aircraft had 22 people on board and carried no cargo, Finance Minister Sri Mulyani Indrawati said, contradicting a statement Garuda made this week that the goods had been declared to customs.

The smuggling of the goods deprived the state of between 532 million and 1.5 billion rupiah (US$37,900-107,000), Indrawati said.

Askhara, his wife and other airline executives were on the flight on November 16, according to the manifest.

“This will not stop there,” Thohir told reporters in Jakarta on Thursday. “We will continue to find other individuals who might be related to this case.”

Askhara and representatives for state-owned Garuda didn’t answer calls seeking comment. Airbus declined to comment.

The shipping of “goods into Indonesia through illegal means happens often and under various modus operandi and through many channels,” Indrawati said. “I have ordered the customs and excise office to step up the supervision.”

Askhara took the helm of the loss-making airline in September 2018 and promised a turnaround. Garuda reported a US$5 million profit for 2018, but in July this year it revised its accounts to show a US$175 million net loss and scrapped a US$241.9 million in-flight entertainment deal after Indonesian authorities found irregularities related to the contract.

Still, Garuda’s shares have rallied 66 per cent this year and are heading for the biggest annual gain on record. The company reported a net profit of US$98.6 million in the third quarter, according to data compiled by Bloomberg.

“I am very sad, at the time when we want to improve the image of the state companies and build up their performance, there are people inside who are not ready,” Thohir said.

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 Thohir’s ministry have even been sent to its offices in Jakarta.

“We support the [State-Owned Enterprises] Minister in the firing of Garuda Indonesia’s chief executive,” a tag on one of the arrangements read.

Additional reporting by AP and Reuters