Cineplex 21 has acknowledged it is affiliated with three film importers previously banned by the government from bringing foreign films into the country, but the Indonesian film giant is rejecting accusations that they are monopolizing the industry.
Camila Internusa Film and Satrya Perkasa Esthetika Film, which used to import Hollywood blockbusters, were banned from doing so by the Finance Ministry in March pending payment of Rp 22 billion ($2.6 million) in back taxes and interest.
A resolution of the controversy over import duties and royalties in June absolved Camila and Satrya’s back taxes issues.
A third distributor, Amero Mitra Film, paid Rp 9 billion in back taxes in May and has resumed importation.
In an exclusive interview with the Jakarta Globe on Thursday, Anitio, a director of Cineplex 21, acknowledged that all three importers were affiliated with the Indonesian cinema giant.
“Legally, the owners of Cineplex 21 and the importers have no relation, but we have always acknowledged we are close to them and we admitted that to KPPU in 2002,” he said, referring to the Business Competition Supervisory Commission.
“We also have a different operational system,” he added.
The third distributor, Omega Film, is also not legally related to Cineplex 21, Anitio said.
But he admitted that it was established by Ajay Fulwani, a nephew of Harris Lesmana, one of Group 21’s primary owners.
Still, he said this did not constitute a monopoly.
“It needs to be understood that we established our business in 1990, that is how we became dominant in the industry,” Anitio said. “We have been investigated four times by KPPU but they have found no monopoly practices in our business.”
Tadjudin Noer Said, a commissioner at KPPU, acknowledged that the cinema industry was dominated by one player, but he explained that as long as it did not control prices, it was not considered a monopoly.
With regard to the back taxes, Anitio said it was not true that they did not want to pay. “We do not have the ability to pay those taxes,” he said.
He argued that the penalty and interest imposed on them was not rational and he disagreed with the government’s calculation of what they owed.
As a director of Cineplex 21, Anitio said he was glad the foreign film dispute had been resolved because the cinema industry must recover from the financial loss incurred during the five-month foreign film drought.
“Although we were still able to air independent films during this time, the foreign film distribution boycott had caused a 60 percent drop in the local cinema industry’s income,” he said.