Court dismisses graft charges against Arifin

JAKARTA (JP): The South Jakarta District Court on Monday dismissed the prosecution's charges against oil tycoon Arifin Panigoro for his alleged issuance of Rp 1.8 trillion (US$240 million) in promissory notes.

According to presiding judge Soedarto, the charges were falsely applied to Arifin.

Arifin is president commissioner of oil company PT Medco Central Asia, a subsidiary of Medco Group.

"I accept the plaintiff's explanation, made last week, which stressed that the commissioners were not responsible for the company's activities and its policies, including the issuance of the promissory notes," Soedarto told the court.

He then told prosecutor Harun Alrasyid to restore Arifin's name.

Inside the courtroom, Harun said he would need time to think about the judge's decision. He said later he would appeal the decision to a higher court.

PT Medco issued 27 commercial papers last July, one of which was bought by state-owned insurance firm PT Jasindo.

Medco claimed funds derived from the notes, which were bought by Jasindo, would be used as working capital and investments, including oil projects in Kazakhstan and Turkmenistan.

The prosecution accused the outspoken businessman of causing Rp 1.8 trillion in state losses, because his company was unable to repay the debts.

Arifin and his legal team repeatedly said his company was ready to pay the debts and insisted his trial was politically motivated.

After Monday's verdict, Arifin told The Jakarta Post: "I feel relief, because our law enforcers have shown that they can still objectively do the right things."

He said the decision showed the public that the country's law enforcement agencies had begun their task of building their long awaited independence and objectivity.

"We should give them the thumbs up," said Arifin, a legislative candidate from the Indonesian Democratic Party of Struggle (PDI Perjuangan).

He speculated that the judges had understood that his case was politically driven.

Earlier on Wednesday, the Central Jakarta District Court also threw out a defamation lawsuit filed by former president Soeharto's youngest son Hutomo "Tommy" Mandala Putra against Gatra weekly magazine.

Sofyan's case

Separately, senior lawyer Todung Mulya Lubis said that in a case which bore strong similarity's to the one against Arifin, the government's constant persecution of his client, businessman Sofjan Wanandi, was wholly politically driven and legally invalid.

Sofjan, a vocal critic of the government, has been persecuted since early 1998, first by then president Soeharto and later by President B.J. Habibie.

A few weeks before Soeharto stepped down under pressure from student demonstrators in May, 1998, Sofjan was implicated, through highly questionable evidence, in the accidental explosion of a homemade bomb. The bomb was reportedly assembled by a group of youth activists at an apartment house in Central Jakarta, Todung said.

The case was discontinued after Soeharto stepped down.

Since early this year, Sofjan, the chairman of the Gemala Business Group, has again been targeted by the Attorney General's Office.

Sofjan left the country last November for medical treatment in the United States. On the advice of his doctors, he has remained overseas to continue his treatment.

Last week, National Police chief Gen. Roesmanhadi said police had sent a letter to Interpol requesting assistance to repatriate Sofjan, who is classified as a fugitive.

A political motive behind the corruption allegation against Sofjan surfaced recently after the leakage of a recorded telephone conversation allegedly between Habibie and Attorney General Andi M. Ghalib, who is currently inactive in his position. The discussion involved investigations into Sofjan and Arifin.

Todung said the allegation of credit fraud against Sofjan was fueled solely by political motives because the state banks' credits, which were said to have been abused, were extended to companies partly owned by Gemala.

Todung said Sofjan was initially accused of wrongdoing in a $16 million commercial paper issued by PT Gemala Sarana Upaya to Bank Bumi Daya (BBD). He said his client was subsequently accused of fraud in connection with about 1 trillion in loans from Bank Rakyat Indonesia (BRI) and Bank Negara Indonesia (BNI).

"These allegations are baseless, because first Sofjan is by no means related to PT Gemala Sarana Upaya, either through its board of directors or in the supervisory board of commissioners.

"Second, the Rp 1 trillion (Rp 891 billion according to Sofjan) in loans from BRI and BNI were extended to six joint venture companies comprising Gemala and other domestic and foreign investors in which Sofjan sits as a member of their boards of commissioners."

The lawyer argued that the debtors were therefore limited liability entities, rather than Sofjan as an individual. He said Gemala was not a controlling shareholder in the six joint ventures, because its ownership ranged from only 22.75 percent to 40 percent.

"The accusations against me are groundless, because these debts are now being restructured under the management of the Indonesian Bank Restructuring Agency (IBRA)," Sofjan contended in a telephone interview with D&R news weekly magazine last week.

He said the fact that many debtors with much larger sums of bad debts to state banks had not been accused of any criminal acts proved that his case was "politically motivated".(emf/vin)