Thu, 24 Feb 2000

Bob Hasan queried over US$2b forestry fraud

JAKARTA (JP): Business tycoon Mohamad "Bob" Hasan was questioned at the Attorney General's Office on Wednesday over his alleged involvement in a Rp 15 trillion (about US$2 billion) fraud of forestry funds.

Speaking to reporters after two hours of questioning, Hasan acknowledged that he borrowed reforestation funds from the government but denied any wrongdoing.

Hasan, a close friend of former president Soeharto, declined to mention the amount he borrowed, but said he had returned Rp 11 billion.

He said he used the funds to invest in industrial timber estates covering 400,000 hectares in East Timor and East Nusa Tenggara.

The investigation is based on findings made by an audit team of the Ministry of Forestry and Plantations and Development Finance Comptroller (BPKP). The other names allegedly involved in the fraud include Soeharto's son Hutomo "Tommy" Mandala Putra, his eldest daughter Siti Hardijanti "Tutut" Rukmana, his half brother Probosutedjo and Prajogo Pangestu and Ibrahim Risjad, who are also Soeharto's friends.

Based on the team's findings, the state suffered losses totaling Rp 15 trillion due to the misuse of reforestation funds and unpaid reforestation fees and forest royalties during 1994 to 1999.

The alleged fraud in reforestation funds alone reached a total of Rp 1.6 trillion.

Timber companies, in addition to royalties, are required to pay reforestation fees to the government, which collects the funds for reforestation purposes. A company, which is developing an industrial timber estate, is allowed to borrow reforestation funds, but the money is often used for other purposes.

The audit team was formed by former minister of forestry and plantations Muslimin Nasution to fight against corruption, collusion and nepotism (KKN).

Widodo Sutoyo, a spokesman for the ministry, said here on Wednesday that Hasan allegedly misused $87 million and Rp 207.8 billion in reforestation funds respectively through his companies PT Mapindo Parama and PT Surya Hutani Jaya. At the current rate, the total funds allegedly misused by Hasan's companies could reach Rp 851 billion.

Mapindo was paid by the government with reforestation funds because the forestry mapping was part of the reforestation program.

Widodo said Mapindo might have marked up the contract as no open tender preceded it.

He did not mention how much the government should have paid, but added that Mapindo's work was of low quality.

"Mapindo used out-of-date technology in its mapping work for the ministry," he said.

Last year, Mapindo faced similar charges by the Association of Indonesian Forest Concessionaires (APHI) for allegedly marking up a $176.94 million aerial photography project of APHI members.

According to APHI, it paid Mapindo $2.42 per photographed hectare, whereas in comparison, state forestry firm Perum Perhutani used another firm's service which charged only $1.80 per photographed hectare.

Soeharto's youngest son Tommy allegedly misused Rp 23 billion of the funds.

"We've delivered our findings to the Attorney General's Office and now it's their turn to investigate this matter," Widodo said.

Widodo reported that Tommy allegedly misused Rp 23.3 billion in forestry funds through his company PT Gatari Hutama Air Services.(01/03)