Expert: Letter of Undertaking is not a guarantee for credit provision
Jakarta (ANTARA) - Professor Emeritus of the Faculty of Law at Gadjah Mada University, Prof. Nindyo Pramono, stated that a Letter of Undertaking (LoU) cannot be viewed as a legal guarantee in the provision of credit facilities because it only functions as a supporting document.
Nindyo expressed this opinion while providing testimony as an expert witness for the defence (a de charge) in the trial concerning alleged corruption in national export financing at the Indonesia Export Financing Agency (LPEI) at the Corruption Court of the Central Jakarta District Court on Friday.
“An LoU is not a form of binding legal guarantee or an absolute requirement in the provision of credit,” he said.
According to him, a letter of undertaking is submitted voluntarily by the debtor and serves only as a reference or secondary consideration for the creditor.
Nindability also explained that LPEI financing has specific characteristics as it is aimed at export-oriented business sectors, including entrepreneurs who have not yet met the financing requirements of conventional banking.
According to Nindyo, as long as the civil settlement process is ongoing, it cannot be immediately concluded that there are state losses or criminal acts. He also assessed that the decisions of company management remain protected by the business judgment rule principle, provided they are made in good faith.
In the same trial, another expert, Alexander Marwata, argued that judges also need to consider the use of funds by debtors and the payments that have been made before drawing conclusions regarding the existence of state losses.
The case relates to the alleged corruption of national export financing at LPEI for the 2015–2020 period, which according to the prosecutor’s indictment, is alleged to have caused state losses of approximately Rp992.82 billion.
The defendants include the former Executive Director I of LPEI (2009-2018) Dwi Wahyudi, Relation Manager of Sharia Financing I Ryan Wahyudi, the Director of PT Tebo Indah (TI) Liu Raymond, and the beneficial owner of PT TI and PT Pratama Agro Sawit, Handoko Limaho.
The defendants are alleged to have participated in several interconnected criminal acts, viewed as a continuous unlawful act to enrich defendants Handoko Limaho and Liu Raymond, thereby harming state or national economic finances.
The unlawful acts allegedly began when Handoko, together with Liu, applied for financing facilities. However, the application was accompanied by feasibility study documents and asset valuation reports from a Public Appraisal Services Office (KJPP) regarding the area of oil palm plantations that did not match the actual conditions.
Due to their actions, the eight defendants are charged with violating Articles 603 or 604 in conjunction with Article 20 letter c of the National Criminal Code, in conjunction with Article 8 of Law Number 31 of 1999, as amended by Law Number 20 of 2001 concerning the Eradication of Corruption.