Businessman questioned in connection with loan scandal

JAKARTA (JP): Businessman The Nin King was questioned by the Attorney General's Office Tuesday as a suspect in an Rp 572.2 billion (US$76 million) Bank Rakyat Indonesia (BRI) loan scandal.

The owner of the widely diversified Argo Manunggal Group was questioned for more than five hours by officers from the Intelligence Operation Center and the Special Crimes Division.

The Nin King, however, refused to speak to reporters after the questioning.

The Nin Kings's lawyer, Deny Kailimang, confirmed that his client was questioned as a suspect in the case.

The investigation followed a report filed by the Movement of Concerned Citizens on State Assets (Gempita) to the Attorney General's Office alleging irregularities in loans given to Nin King from state-run BRI.

BRI's president director Djoko Santoso Moeljono was questioned by the Attorney General's office last week.

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

Unlike three other state banks which will be merged, the government has decided to continue BRI's operation. However, it will undergo massive downsizing and focus on lending to small enterprises, handing over its large corporate clients to the newly established Bank Mandiri.

Gempita questioned Djoko's decision in approving loans to companies under the Argo Manunggal group despite the fact that these companies were performing poorly.

These loans include a Rp 99.1 billion loan 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 loans to real estate companies Karawang Utama, Surya Karya Pratama and Maligi turned bad despite efforts by BRI to rescue them.

Gempita also claimed dubious practices in BRI's $50 million loan to PT Mulia Griya Indah, a unit of the Mulia Group, for the development of the Taman Anggrek II housing project.

Deputy Attorney General for Special Crimes Anton Sujata said on Monday that Djoko, The Nin King and the owners of the Mulia Group, Djoko Soegiarto Chandra and Eka Chandra Negara, have been barred from leaving the country pending further investigation. (byg)