AGO to probe bad debtors linked with govt officials

Rendi A. Witular, The Jakarta Post, Jakarta

Stepping up their investigations into the alleged lending scandal at state Bank Mandiri, prosecutors plan to probe a number of bad debtors who have links with top government officials.

Deputy attorney general for fraud Hendarman Supandji said on Wednesday the Attorney General's Office (AGO) would probe more firms related to the alleged lending irregularities at the nation's largest bank, including those having links with high- profile figures.

"We are not afraid of probing them (firms linked with government officials). The President's instruction is clear that we should investigate this case thoroughly," said Hendarman at the State Palace.

Attorney General Mochammad Abdurrahman Saleh refused to comment further on the case, saying he had ordered Hendarman to resolve the case within three months.

The AGO opened an investigation into the Mandiri last month after the Supreme Audit Agency (BPK) released the results of its 2004 audit of the bank.

Prosecutors say they are investigating alleged irregularities in the bank's lending practices.

Prosecutors have summoned top Bank Mandiri officials for questioning, including the bank's president ECW Neloe, but have not named any of these officials suspects in the case.

Hendarman said the AGO had not discriminated between individuals when investigating the case.

"There is no discrimination in the investigations. Companies linked with the current administration will also be probed. I have received no pressure from any senior government official when doing my job," he said.

The AGO is currently focusing its probe on loans worth Rp 1 trillion (about US$105 million) given to five companies -- PT Siak Zamrud Pusaka, PT Citra Graha Nusantara/Tahta Medan, PT Lativi Media Karya and PT Artha Bhama Texindo/Artha Tri Mustika Texindo.

The five are among 28 companies reported by the Supreme Audit Agency (BPK) to have allegedly received loans from Bank Mandiri worth more than Rp 12 trillion without proper lending procedures.

According to the BPK report, cement maker PT Semen Bosowa Maros and coal producer PT Arutmin Indonesia are among the 28 companies.

Semen Bosowa is owned by the nephew of Vice President Jusuf Kalla, while Arutmin has a close links with Coordinating Minister for the Economy Aburizal Bakrie.

Kalla and Aburizal acknowledged that they had an indirect link with the companies but insisted the companies would have no problems servicing their loans.

Based on the report, Bosowa has some Rp 1.44 trillion of debts in Bank Mandiri classed in "level 2" debt category, while Arutmin has some US$88 million "level 1" debts.

Both categories mean the companies have no serious difficulties servicing the loans. A level 5 loan is categorized as a bad debt.

Hendarman said the prosecutors would expand the investigation to look at such companies during its meeting with the BPK scheduled on Monday, with the agency pledging to submit detailed case files about the remaining 23 companies to the AGO.