Garuda defends financials of 2018 amid regulator scrutiny

Bloomberg

PT Garuda Indonesia defended the validity of its 2018 finances after a regulator raised questions about how the national carrier accounted for certain transactions, including with a startup technology company.
The airline booked revenue of $211.9 million from PT Mahata Aero Teknologi, its annual report showed. The contribution helped Garuda to report a net income of $809,846 last year compared with a loss in 2017.
“The accounting rule requires us to record the transaction in such a way,” Fuad Rizal, director of finance and risk management, said at a briefing at Jakarta Airport. “Even under an extreme situation where the contract was terminated by Garuda or by Mahata, our rights over the receivables will not go away.”
In exchange for the payment, Mahata gained the rights to provide inflight
entertainment, internet connectivity and earn revenue from onboard advertising on Garuda’s flights, Rizal said
His comments come days after Indonesia’s Financial Services Authority, known as OJK, said it will scrutinise some dealings which may
affect Garuda’s 2018 financial results. The agency may impose sanctions on the company or its auditor if wrongdoing is uncovered,
OJK said.
The stock rose 4.6%, taking its gain this year to 38%.
Hoesen, an executive at the Financial Services Authority, told reporters.