Ex-Mandiri president detained for graft

Ex-Mandiri president detained for graft

Eva C. Komandjaja, The Jakarta Post, Jakarta

Just one day after losing the top executive post at Bank Mandiri,
Edward Cornelis William Neloe was detained on Tuesday for his
role in an alleged lending scam that hit the country's richest
bank.

The Attorney General's Office (AGO) detained Neloe, the bank's
former vice president I Wayan Pugeg and director of corporate
banking M. Sholeh Tasripan after a marathon questioning session
that lasted over 10 hours.

The arrest warrant, signed by head of the investigating team
Suwandi, says the detention will expire in the next 20 days.

Deputy Attorney General for Special Crimes Hendarman Supandji
told The Jakarta Post the decision to take the three bankers into
custody came after he examined the results of the investigation
into the case and the report from the Supreme Audit Agency (BPK).

"All the 12 prosecutors who are investigating the case have
convinced me the suspects are guilty of corruption and could be
punished under the 1999 Anticorruption Law," he said.

Hendarman, who leads the recently introduced Coordinating Team
for Corruption Eradication, said he had obtained approval from
Attorney General Abdul Rahman Saleh to detain the three bankers,
who were declared suspects last Wednesday.

The scandal has caused up to Rp 12 trillion (US$1.28 billion)
in state losses, according to the prosecutors.

Abdul Rahman had previously said he suspected the loans
disbursed by the bank were meant to become bad debts from the
outset, indicating conspiracy and corruption in the lending.

The prosecutors had arrested four other suspects, who are
executives of PT Siak Zamrud Pusaka, PT Lativi Media Karya, PT
Cipta Graha Nusantara/Tahta Medan and PT Artha Bhama
Texindo/Artha Tri Mustika Texindo (ABM/ATM). The firms were among
28 companies that received the loans.

Neloe, Pugeg and Tasripan appeared for questioning as suspects
for the first time on Monday, hours before the state-owned bank
announced a major reshuffle in its extraordinary shareholders
meeting.

One of the lawyers for the suspects, Mohammad Assegaf, said
the questioning on Tuesday concerned loan procedures in the bank.

"The questions were similar to those given to them when they
were still witnesses. They were general questions about the
bank's loan policy," Assegaf told reporters.

He added that extending loans was a "bottom-up" decision,
meaning that credit analysts had to study credit applications
before taking them to the bank's directors.

"What we have here as a problem is a lack of prudence in
approving a loan proposal. What can the directors do if their
subordinates consider the applications are OK?" Assegaf said.

Assegaf added that most of the loans were guaranteed by
collateral worth between 150 percent and 200 percent of the value
of the loans obtained by the companies, therefore the loans could
not be considered "state losses".

The lawyer questioned the purpose of the arrest, citing
Hendarman's statement saying the Mandiri directors were
"cooperative" with the investigators.

"I thought my clients were cooperative enough. The deputy
Attorney General said the arrest was to prevent them from
fleeing, which does not make sense since they have already been
banned from traveling abroad," Assegaf said.

He added he would request a delay to the detention in the next
few days.

Another lawyer for the suspects, Luhut MP Pangaribuan, said he
was seeking banking, administrative law and criminal law experts
to testify in court that the loans extended to the 28 companies
complied with lending procedures.