Jakarta. Attorney General Sanitiar Burhanuddin announced on Wednesday his office has launched a criminal investigation into alleged corruption in state-owned airline Garuda Indonesia concerning aircraft lease.

Burhanuddin said the alleged fraudulent procurement has inflicted a loss of at least Rp 3.6 trillion ($250 million) to the state.

“We begin the criminal investigation today. There are a number of lease contracts that will be investigated thoroughly, concerning the lease of ATR, Bombardier, Airbus, and Boeing aircraft," the attorney general said in a virtual news conference in Jakarta.

The initial stage of the investigation will cover the lease of ATR 72-600 and Bombardier planes, according to Febrie Adriansyah, the deputy attorney general for special crimes. 

“There is a quite significant loss in this case. For instance, in the aircraft lease alone, [Garuda] lost an estimate Rp 3.6 trillion,” Febrie said.

He said the alleged corruption happened during the leadership of Emirsyah Satar, who is now serving eight years’ imprisonment for taking millions of dollars in bribe money and luxury goods from individuals and companies who won procurement contracts from Garuda.

Emirsyah became the president director of Garuda in 2005 and resigned in 2014 amid mounting graft allegations.

He was named corruption suspect by the Corruption Eradication Commission (KPK) in January 2017 and convicted in May 2020 after a protracted investigation.

Febrie said the Attorney General’s Office (AGO) will work together with the KPK who first launched a graft investigation against the airline.

The AGO’s announcement came a week after State-Owned Enterprises Minister Erick Thohir reported alleged fraud in the Garuda’s lease of ATR planes.

The criminal probe comes as a serious blow to Garuda already on the brink of bankruptcy.

According to the September 2021 financial reports, Garuda has negative equity of $2.8 billion, and the burden increases by $100-150 million per month.

The company is currently renegotiating rates with creditors and aircraft lessors to restructure its debts and reduce debt loads.