Bob Hasan told to return $2.04b in forestry fees

Bob Hasan told to return $2.04b in forestry fees

JAKARTA (JP): A breakaway reform group of the Indonesian
Forestry Society (MPI) is demanding that timber tycoon Mohamad
"Bob" Hasan return US$2.04 billion he collected in forestry fees
from 1991 to 1997.

The chairman of MPI Reformasi's investigation team Agus
Miftach said on Monday that Hasan -- a crony of former president
Soeharto -- also collected commissions, promotion funds and
trading monopolies on plywood products. He also accused Hasan of
gathering an estimated $8 billion from sawn timber, wood by-
products, pulp and paper products, plus monopolies on aerial
photography of forests and insurance.

Appointed chairman of MPI in 1991, Hasan resigned last March
following his appointment as minister of trade and industry. The
change in the government in May split MPI into two groups, one
remaining loyal to Hasan and the other advocating reform.

Agus said his group had set up a team to recover the money,
which Hasan allegedly has in banks in the country, as well as
Singapore and Hong Kong.

MPI is an umbrella group for nine forestry-related
organizations, including the Association of Indonesian Wood Panel
Producers (Apkindo), the Association of Indonesian
Concessionaires (APHI) and the Indonesian Saw Millers Association
(ISA).

The old MPI and its association members have been criticized
for alleged crony capitalism and grasping rent-seeking practices.
Apkindo's monopoly was abolished in February under the
government's agreement with the International Monetary Fund
(IMF).

Agus said Hasan deposited about Rp 25 billion of MPI funds in
Bank Muamalat, plus Rp 25 billion and Rp 800 billion respectively
in Bank Bukopin and Bank Umum Nasional, which is now closed.

Agus said it was unclear if Hasan deposited the funds in his
own name. He accused Hasan of using MPI funds to back his
offshore loans.

MPI Reformasi chairman Sofyan Simbaton said that since early
1991, Apkindo had obliged all plywood companies, numbering about
112, to export only through its trading arms set up in various
regions and under its export prices and quotas. He said it was
done by government consent.

The trading firms collected commissions ranging from $6 to $20
per cubic meter depending on the export destination.

"Plywood producers have actually never known the actual prices
paid by buyers overseas because only Apkindo's trading firms are
authorized to deal with buyers," he said.

Export shipments and insurance were also arranged by Apkindo
whereby Hasan's PT Karana Lines and Tugu Insurance played a major
role, he said.

Exports to main markets such as Japan and South Korea were
obliged to use Karana Lines which charged $2 per cubic meter,
Sofyan said.

Agus said the team had set a target to recover at least 25
percent of the $2.04 billion by the end of this year.

"We plan to hire private detectives to investigate Hasan's
deposits overseas and to find his right-hand man, Edward Anwar.
We want to report our investigation to the Attorney General's
Office, but we are hesitant because we doubt its independence."

Sofyan said recovered funds would be earmarked for companies
under MPI and the rest would go to poor villagers to buy basic
commodities.

"We will use the funds for forest rehabilitation programs and
social programs for people living near forests."

He said the organization had met leaders of the Hasan-backed
MPI to discuss the possibility of merging the two societies.
(gis)