Bosowa, Bakrie companies clean, syas AGO chief

Bosowa, Bakrie companies clean, syas AGO chief

Tony Hotland, The Jakarta Post, Jakarta

Defending its decision not to investigate two firms linked to top
government officials, the Attorney General's Office (AGO) asked
state auditors on Thursday to produce clearer indications of
state losses caused by the extension of loans to the companies.

Deputy attorney general for special crimes Hendarman Supandji
said a preliminary review by his office did not find any state
losses from the disbursement of loans to cement producer PT Semen
Bosowa Maros and telecommunications firm PT Bakrie Telecom by
state-owned lender Bank Mandiri.

Bosowa is owned by Aksa Mahmud, a nephew of Vice President
Jusuf Kalla, and Bakrie Telecom is owned by chief economics
minister Aburizal Bakrie.

"Now it's up to BPK (the Supreme Audit Agency) to seek more
concrete indications that the loans given to these firms could
lead to losses of state funds. If there is any, of course, we
will investigate," Hendarman told a hearing with legislators.

During Thursday's hearing, Attorney General Abdul Rahman Saleh
said the media have misunderstood his statement about the review
of the loans for the two firms.

"There was never any investigation, so there's no halting of
anything. The media took my statement wrongly by saying that we
halted or dropped the investigation," he said.

He denied that there was any pressure from any party to exempt
the two firms from corruption probes because of their ownership
status.

Media reports said last Saturday that the AGO had decided to
halt its graft investigation into Bosowa and Bakrie Telecom.

Hendarman said the AGO was focusing more on intensifying the
probes into lending scandals involving Bank Mandiri, the
country's largest bank in term of assets, which have proven to
contain indisputable indications of state losses.

In its report, the BPK discovered many irregularities in the
extension of loans to the two firms. The loans for PT Semen
Bosowa Maros were approved despite the fact there was a high risk
that the company would fail to repay the debts.

As for PT Bakrie Telecom, Mandiri decided to extend loans even
though the debtor has a G (risky) rating due to a troubled
restructuring process and overrated business prospects, and has
had experienced unsound financial conditions over the past four
years.

During Thursday's meeting, House of Representatives members
questioned the AGO's decision favoring the two companies, saying
the government must have interfered with prosecutors' work.

They said it was odd, since the AGO's decision not to
investigate the two firms came shortly after advice by Vice
President Kalla that prosecutors should be careful in probing the
lending scandal, and Minister Aburizal's statement that not all
irregularities should be perceived as corruption.

The AGO initially planned to investigate around 28 companies,
including the two well-connected firms, in relation to alleged
irregularities in the extending of loans worth over Rp 12
trillion (US$1.28 billion).

So far, the AGO has been focusing on four corporate borrowers
-- PT Cipta Graha Nusantara/Tahta Medan (CGN/TM), PT Siak Zamrud
Pusaka (SZP), PT Lativi Media Karya (LMK) and PT Artha Bhama
Texindo/Artha Tri Mustika Texindo (ABM/ATM).

Top officers from PT CGN/TM and PT SZP have been detained as
suspects along with former Bank Mandiri president director E.C.W.
Neloe, vice president director I. Wayan Pugeg and former director
M. Sholeh Tasripan.

Hendarman, who also chairs a special antigraft team, said the
AGO is expected to declare more suspects within the next 10 days,
including those from Mandiri.