AGO names Mandiri CEO, directors suspects

AGO names Mandiri CEO, directors suspects

Eva C. Komandjaja, The Jakarta Post, Jakarta

Bank Mandiri president director E.C.W. Neloe was named as a
suspect by the Attorney General's Office (AGO) on Wednesday for
his alleged role in the lending scam at the giant state-owned
bank.

Two other top Mandiri officials, vice president I Wayan Pugeg
and director for corporate banking M. Sholeh Tasripan, were also
named suspects. None of the three have been detained.

Office spokesman R.J. Soehandojo said AGO investigators would
charge the three in connection with their roles in the lending
scam.

"Our investigators found indications that these three Mandiri
directors were strongly connected to this case," he added, but
refused to give details.

The AGO has been investigating loans allegedly given
improperly to four companies. But it has said that the
investigation would be later expanded to cover a total of 28
companies involving loans of more than Rp 12 trillion (US$1.28
billion).

Attorney General Abdul Rahman Saleh had previously said that
he suspected the loans given by the bank to four firms were meant
to become bad loans from the outset; indicating likely conspiracy
and corruption in the lending.

Responding to the statement, Soehandojo said: "If the Attorney
General has said so, that must be the reason the three Mandiri
directors were named as suspects today".

Deputy Attorney General for Fraud Hendarman Supandji earlier
said the suspects appeared to have intentionally flouted
prudential banking principles when they extended loans to the
four companies.

However, Soehandojo could not mention the total amount of
state losses caused by the bad loans given by the bank to the 28
companies saying that the Supreme Audit Agency (BPK) had not
finished auditing them.

"The suspects will be interrogated again on Monday. We might
get additional information from this interrogation. It is also up
to the investigators whether they will arrest them on Monday or
not," Soehandojo said.

He said that the suspects would be charged for offenses under
the Corruption Eradication Law No. 31/1999.

Prosecutors have repeatedly questioned a series of Bank
Mandiri directors in relation to this case.

The AGO earlier arrested four suspects from four companies --
PT Lativi Media Karya (LMK), PT Siak Zamrud Pusaka (SZP), PT
Cipta Graha Nusantara/Tahta Medan (CGN/TM) and PT Artha Bhama
Texindo/Artha Tri Mustika Texindo (ABM/ATM) -- all which are
still under intensive investigations.

"(The) Deputy Attorney General for Fraud submitted travel ban
requests for the three suspects to the Attorney General last
Tuesday," Soehandojo said.

The Wednesday announcement will give State Minister of State
Enterprises Sugiharto a good reason to replace the three top
Mandiri officials. He previously affirmed that the government
would replace any executives of state enterprises named suspects
in corruption cases.

Bank Mandiri is scheduled to hold its annual shareholders'
meeting on May 16, with one of the items on the agenda being a
management shakeup following the disclosures surrounding the
alleged lending scam.

Soehandojo said the Supreme Audit Agency (BPK) had finished
auditing four more companies -- PT Domba Mas, PT Batavindo, PT
Bosowa and PT Bakrie Telecom -- and had submitted its results to
Hendarman on Wednesday.

Coordinating Minister for the Economy Aburizal Bakrie owns the
Bakrie Group, including its subsidiary Bakrie Telecom. Last
year's audit of publicly listed PT Bakrie & Brothers showed that
PT Bakrie Telecom secured a long-term loan worth Rp 548.2 billion
from Bank Mandiri.