CFO’s Lie Costs Indonesia Company $500K

Pertamina’s finance chief falsely stated that money in company accounts belonged to the Indonesian government, influencing the result of arbitratio...
Stephen TaubOctober 30, 2007

Indonesia’s state oil company was fined $500,000 by a New York court for the “intentional” false deposition of its former chief financial officer, according to the Financial Times.

Judge Thomas Griesa determined that Ainin Na’im, former finance chief at Pertamina, lied in a dispute with Karaha Bodas, a U.S. energy company, over a cancelled geothermal project, the paper reported.

Griesa reportedly deemed Na’im’s assertions that money in Pertamina accounts belonged to the government and not the company as “grave indeed.”

CFO Insights on Inflation, Workforce Challenges, and Future Plans 

CFO Insights on Inflation, Workforce Challenges, and Future Plans 

Download our 2022 survey report for a high-level view of finance team projections and strategies, directly from our executive readers.

“Pertamina and Na’im knew that the testimony being given had an important bearing on whether Karaha Bodas (KBC) would be able to recover the $261 million arbitration award,” the judge was said to have stated. The arbitration reference was about a ruling made by a Switzerland-based panel in 2000 that Pertamina should pay KBC $261 million for losses incurred and future profits lost when the Indonesian government cancelled the project in 1997, according to the report.

The cancellation resulted from the 1997 Asian financial crisis, the Financial Times noted.

Karaha Bodas was created and controlled by U.S. companies Florida Power & Light and Caithness Energy.

According to the report, back in March Pertamina paid the arbitration award and $58 million in interest after a number of appeals failed. Bambang Wiranto, another witness, corrected Na’im’s lie in 2004, helping to resolve the case.

4 Powerful Communication Strategies for Your Next Board Meeting