Ex-Mandiri directors face life

Ex-Mandiri directors face life

Tb. Arie Rukmantara, The Jakarta Post, Jakarta

Former Bank Mandiri president director Edward Cornelis William
Neloe and two other ex-directors of the largest state-owned bank
stood trial here on Monday for a lending scam and could face life
imprisonment if convicted.

Neloe, 61, former risk management director of the bank I Wayan
Pugeg, 58, and its former director for corporate and government
affairs Soleh Tasripan, 49, were charged with involvement in a
major graft case that caused US$18.5 million in state losses.

Prosecutors told the South Jakarta District Court that the
defendants were guilty of violating Article 55 of the
Anticorruption Law, which carries a minimum penalty of four
years' imprisonment and a maximum of life imprisonment.

"The three defendants, either individually or in cooperation
with others, have enriched themselves, others or companies and
have caused losses to the state and the country's economy," said
chief prosecutor Baringin Sianturi, reading out the 82-page
indictment.

They approved loans totaling $18.5 million to private firm PT
Cipta Graha Nusantara (CGN) without properly examining its
credibility and viability and the feasibility of projects to be
financed with the money, he said.

The approval was given without a "thorough analysis to
ascertain that the client was bona fide and capable of repaying
the loan," Sianturi said. "There was no honest, objective,
detailed and accurate analysis carried out."

Sianturi said CGN applied for the credit to acquire PT Tahta
Medan, which operates Hotel Tiara in Medan, North Sumatra, from
PT Trimanunggal Mandiri Persada (TMP), which the prosecutors
linked to Golkar politician and media tycoon Surya Paloh.

TMP bought Tahta Medan from the Indonesian Banking
Restructuring Agency (BPPN) though a bidding.

"The defendants authorized to decide on providing the loans
did not carefully examine the real assets of Tahta Medan. In
reality, TMP acquired it from BPPN for only Rp 97 billion ($9.7
million)," Sianturi said.

"It means that the amount of the loans provided to CNG was
about Rp 63 billion higher than the real assets of Tahta Medan."

Immediately responding to the indictment, chief lawyer for the
three defendants O.C. Kaligis said the charges were "obscure" as
the prosecutors failed to define the role of each defendant in
the scam.

In his 36-page defense plea, he said his clients should not be
blamed for providing the loans which were decided on based on
recommendations from various departments in Bank Mandiri.

"There is no way that the bank's directors could directly
verify the credibility of a debtor because there are thousands of
them. Therefore, the prosecutors should also charge other
executives responsible for the loans," Kaligis said after
Monday's trial.

He highlighted that normally, as a Mandiri president director,
Neloe was only allowed to approve loans of up to Rp 15 billion.

"If a company could get Rp 160 billion in loans, it means that
the bank's commissioners were also aware of the decision," he
said.

Presiding judge Sudharto, who also heads the court, adjourned
the trial until Oct. 17 to hear the response from the
prosecutors.

The case was part of a Rp 12.2 trillion massive lending scam
allegedly implicating the same bank and various businesses
connected to several noted politicians, including Vice President
Jusuf Kalla and National Mandate Party leader Sutrisno Bachir.

The three defendants have been detained since May 17.