Attorney General's Office, House urged to probe steel mill scandal
Ridwan Max Sijabat, The Jakarta Post/Jakarta
More than two hundred students and activists from Surabaya, East Java, have urged the Attorney General's Office and the House of Representatives to investigate an alleged financial scandal involving three steel mills of the Gunawan Steel Group in the provincial capital, believed to have caused more than Rp 1 trillion in state losses.
The demonstrators, who were unable to meet with Attorney General Abdurrahman Saleh, held a free speech forum over the weekend after a demonstration at the Attorney General's Office. They held up banners reading Usut kredit macet Gunawan Group (investigate the Gunawan Steel Group's credit scam), Tangkap oknum BPPN yang korup (arrest corrupt employees of the former Indonesian Banking Restructuring Agency/IBRA) and Pemerintahan baru harus mengusut penipuan dalam skandal Gunawan Group (the new government must investigate the Gunawan Group scandal).
Agus H., coordinator of the Network of People Against Corruption, said in the forum that the Attorney General's Office and the House had to investigate the scandal because the steel group, chaired by Gwie Gunawan, alias Gwie Sin An, had apparently retaken control of three steel mills seized in 1998 by IBRA as collateral against Rp 1.45 trillion (US$159.70 million) it owed to Bank Mandiri and now-liquidated Bank Bali.
"The Gunawan Steel Group bought the three mills for Rp 185 billion through three companies that are believed to be owned by the Gwie family, with the help of corrupt politicians in the East Java legislature and former IBRA staffers," Agus said.
M. Arief, chairman of the Committee to Monitor State Assets (KPKN), said the group's assets in the three steel mills were confiscated by IBRA for its inability to repay the huge debt to the two banks, but were later sold under the agency's asset sales program to two companies believed to be owned by the same group.
"PT Gunawan Dian Steel Pipe (GDSP), with its troubled Rp 453 billion credit, was sold for Rp 27 billion to PT Bina Kreasi Prima Niagatama, while PT Gunawan Iron Steel (GIS), with its Rp 234 billion credit, was sold for Rp 14 billion to (Bina Kreasi). PT Gunawan Dianjaya Steel (GDS), with its Rp 762 billion in defaulted loans, was sold for Rp 144.8 billion to PT Parma Iriando Perkasa.
"The two firms that bought the three troubled companies belong to the Gunawan Steel Group, and this violates regulations on asset sales conducted by the government," he said.