Former minister of finance questioned over Freeport deal

Former minister of finance questioned over Freeport deal

JAKARTA (JP): Prosecutors at the Attorney General's Office
questioned on Tuesday former minister of finance J.B. Sumarlin as
part of an investigation into alleged corruption in the 1991
extension of the mining contract of copper and gold producer PT
Freeport Indonesia.

"I came here to make a statement regarding the process leading
to the extension of PT Freeport Indonesia's contract," Sumarlin,
who was minister of finance when Freeport extended its contract
in 1991, was quoted by Antara as saying.

The Attorney General's Office has questioned several people to
probe the accusations highlighted by American scholar Jeffrey A.
Winters last month that corrupt motives influenced the renewal of
Freeport's contract in 1991.

Winters said Coordinating Minister for Economy, Finance and
Industry Ginandjar Kartasasmita, who was minister of mines and
energy when the contract was extended, was implicated in the
scandal.

Winters, quoting the results of a study by consultancy firm
Econit, said Ginandjar helped his friend Aburizal Bakrie acquire
a 10 percent stake in Freeport which was developing the world's
largest gold and copper reserve in the Grasberg area in the
country's easternmost province of Irian Jaya.

Freeport sold the 10 percent stake to Bakrie's company
Indocopper Investama as part of a divestment program under its
renewed contract.

Winters suspected that there was collusion between Bakrie and
Ginandjar behind the deal. He questioned why the 10 percent stake
was not offered to the government.

Ginandjar said the stake was first offered to the government
but Sumarlin rejected the offer. He also accused Winters of
defaming him.

"At the time, the government was not interested in the offer
because it lacked funds as the state budget was focused on
financing infrastructure and physical utilities," Sumarlin said
after 90 minutes of questioning.

Freeport later offered the shares to the private sector, he
added.

Bakrie sold Indocopper to PT Nusamba Minerals and Freeport
Indonesia's main shareholder, the United States giant mining
company Freeport McMoRan Copper & Gold.

Freeport Indonesia is currently 81.28 percent owned by
Freeport McMoRan, 9.36 percent by the Indonesian government, 9.36
percent by PT Indocopper Investama Corporation. Indocopper is
50.48 percent owned by Nusamba Mineral Industries, 49 percent by
Freeport McMoRan and 0.52 percent by members of the public. (jsk)