BRI boss probe over graft charges

BRI boss probe over graft charges

JAKARTA (JP): President director of government-owned Bank
Rakyat Indonesia (BRI) Djoko Santoso Moeljono was questioned by
the Attorney General's Office on Thursday as a suspect in a Rp
572.2 billion ($76 million) loan scandal, Antara reported.

There was no explanation from the Attorney General's Office,
but Djoko's lawyer Sulistiyo confirmed that his client had signed
a dossier drawn up from the questioning session that lasted more
than five hours, the news agency said.

He signed in his capacity as a suspect, the lawyer said.

The investigation, conducted by attorneys from the
Intelligence Operation Center and the Special Crime Division,
centered on a series of BRI loans that Djoko had reportedly
approved for businessman The Nin King, the owner of the widely
diversified Argo Manunggal group.

BRI is one of seven state banks currently being restructured
because of massive overlending practices in the past.

Unlike three other state banks, BRI will be retained but it
will undergo massive downsizing to focus on lending to small
enterprises and would hand over its large corporate clients to
the newly established Bank Mandiri.

Djoko's investigation followed a report filed by the Movement
of Citizens Concerned with State Wealth (Gempita) to the Attorney
General's Office alleging irregularities in BRI's lending
practices.

Gempita questioned Djoko's decision in approving loans to
companies under the Argo Manunggal group although they were
performing poorly, according to Antara.

They include loans amounting to Rp 99.1 billion to PT Karawang
Utama Tekstil, Rp 66.4 billion to PT Surya Pratama, Rp 57.5
billion to PT Maligi Spinning Mills, Rp 9.2 billion to PT Multi
Sweeten Industries and hundreds of billions of rupiah to Argo
Manunggal's real estate unit.

The credits for Karawang Utama, Surya Karya Pratama and Maligi
turned bad in spite of efforts by BRI to rescue them. The credits
to the real estate sector had also been disbursed but the project
was not carried out.

Gempita also claimed dubious practices in BRI's US$50 million
loan to PT Mulia Griya Indah, a unit of the Mulia Group, for the
development of the Taman Anggrek II housing project. It is not
immediately clear however whether the Djoko investigation also
covered the loans to the Mulia Group.

In response to Gempita's allegations, Attorney General Andi
Muhammad Ghalib had promised to look into the matter. On
Thursday, he made good on his pledge. (emb)