The Sting that Failed

Raids on Shops Suspected of Defrauding Chinese Tourists Thwarted by Pre-Raid Leaks

NusaBali reports that efforts to conduct joint raids by Provincial and Regency enforcement teams on shops suspected of using underhanded business practices that included selling overpriced items to “captive” Chinese tourists, illegally employing Overseas Chinese clerks, and using off-shore payment technology were unable to produce the expected results, suggesting that shops may have received advance notice of the coming raids.

The joint enforcement teams undertook raids at shops suspected to be owned by overseas Chinese using local nominees in Kuta, Bali on Wednesday, October 24, 2018. The targets of the raids were identified by authorities in advance of being involved in the practice of selling overpriced merchandise in order to recoup the cost of subsidized tour packages to Bali being sold on the Chinese market where a 5-day holiday in Bali including air and hotel can cost as little as US$400. The same shops targeted in the raids were also suspected of doing business transactions using offshore wechat pay/barcode technology and employing overseas Chinese without working permits.

The shops slated for the raids were the same visited earlier on Thursday, October 18, 2018, by Bali’s Deputy-Governor Tjokorda Oka Artha Ardhana Sukawati, also known as “Cok Ace.” Some of the shops had closed their doors fueling suspicions that news of the second series of raids had been “leaked” beforehand to the businesses.

The joint enforcement team was also accompanied by the head of the intelligence subsection from the Denpasar Immigration Office and officials of the local Department of Trade.

Departing at 10:00 am on Wednesday, October 24th the raiding parties descended on the Toko Empress Jewelry store on Jalan Dewi Sri in Kuta, a shop that sells rings, necklaces and bracelets at prices that can range into the tens of millions of rupiah. The picture of the store’s owner is prominently displayed on the wall of the ship. During the raid, a shop keeper drew the raiders’ attention to a photo taken during the shop’s grand opening showing Nonya Ayu Pastika, the wife of Bali’s former governor, officiating in her capacity as the chairperson of the Bali Handicraft Council. The shopkeeper said she had only recently joined the company while the owner, Susilowati, was in Jakarta at the time of the raid.

Rosmini told officials that no sales were transacted at the shop using wechat/barcode technology and that all sales were done in Indonesian Rupiahs. NusaBali suggested that Rosmini seemed well-informed and prepared for the raid. She told immigration officials that only Indonesian citizen were employed at the shop.

The head of the Provincial Enforcement Agency (Kasatpol PP Pemprov Bali), Sukadana, expressed his suspicion on the overall legality of the shop during the raid and asked Rosmini to present the building permit. She was only able to show the business operating permit.

When the raiding parties shifted their attentions to Toko Kalimanta on Jalan Sunset Road in Kuta, they found a shop selling imported Chinese merchandise that included traditional Chinese medicines. All the staff employed in the shop spoke Mandarin Chinese. When the raiding party arrived the employees quickly ordered their customers to leave the shop.

Staff members quickly removed ID cards worn by their Chinese customers and disappeared with the IDs to the back area of the store.

Official found that Toko Kalimanta does not hold the required operating license despite the fact that the shop has been open for around 3 years. Officials conducting the raid were frustrated when none of the staff could direct them to the establishment’s manager. Sukadana was incredulous that such a large place of business could be running without any staff in attendance who could identify the owner or management.

One employee, Meisya, hailing from Singkawang in West Kalimantan, said she did not know who managed the shop. Moreover, Meisya refused to name who was in charge. Meisya was immediately given a written summons by the Badung Regency Enforcement Team to appear for a formal interview with investigators.

One employee confirmed to members of the media joining the raids there was at least one Chinese national working at the Toko Kalimanta. The unnamed informant said the Chinese workers was suddenly granted leave, saying: “Today, many employees were given the day off after being told there would be a raid. If you would like to see (the Chinese workers), just come tomorrow.”

The joint raiding parties then visited to Althenbha Store located in Benoa Square on Jalan Ngurah Rai in Kedonganan in Kuta where they encountered more prevarication. The building manager, I Made Sumasa, invoked the name of Tommy Soeharto, the son of Indonesia’s late President Soeharto, telling the head of the Provincial Enforcement Team that Soeharto owned Benoa Square. He then explained that Soeharto, in turn, rented out space to restaurants, banks, food stands and handicraft shops. The building management confirmed that the Althenbha shops space had been rented by a Chinese national, but was closed on the day of the raid. The team was told that the management of the Toko Althenbha was a person named Sarbin. The shops was not yet open for business. A summons was left from Sarbin to report to the Satpol PP and bring all relevant permits and licenses.

The raiders’ next stop was the Mahkota Shop on Jalan Bypass Ngurah Rai in Kedonganan. This shop had been visited by the Deputy Governor more than a week earlier, but was closed and shuttered during the subsequent visit by local enforcement teams. The name of Toko Mahkota had been changed to Lisa Gemstone. The guards at the store could not explain why the shop had been suddenly closed. When officials unsuccessfully tried to open the front door they could see uneaten food and coffee cups filled with liquid on an inside table.

Sukadana confirmed that formal summons were left with guards at all the shops visited, reminding all concerned that licenses and permits must be put in order, including business permits, working permits for foreign nationals and proof that all local laws were being obeyed.

Sukadana added the warning: “If they fail to honor our summons, we will close down the operations.”

Sukadana said the combined enforcement team would enforce the law if violations of labor laws, illegal financial transactions on wechat and the sale of unlicensed imported items in Bali.

Officials suspect that no clear violations were discovered in the most recent raids was probably due to advance warnings given to the owners. Officials warned the matter would not end there and all business were liable to return visits by enforcement teams at any time in the future when the companies face possible immediate closure.

As reported on Balidiscovery.com, when Cok Ace conducted surprise inspections of a number of shops he found evidence of illegal operations, including foreign nationals working on tourist visa and pricing policies created to subsidize unrealistically priced travel packages from China to Bali.

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