Court dismisses graft charges against Arifin

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)