Golkar issues restrained comments on Kanindo case

Golkar issues restrained comments on Kanindo case

JAKARTA (JP): The ruling Golkar political group yesterday
issued restrained comments regarding the scandal at the giant
Kanindo Success Textile company which is owned by one of its
major donors, the controversial businessman Robby Tjahjadi.

While endorsing the planned takeover of the business by
GKBI, the Association of Batik Cooperatives, Golkar officials
refrained from disclosing what actions they plan to take against
Robby in view of the huge debt scandal.

Warno Hardjo, who coordinates Golkar's economic departments,
told a press conference that if GKBI eventually took over Kanindo
management, it would mark GKBI's first ever involvement in a
mammoth business deal.

"We will be proud to see GKBI play a major role in business,"
he said, adding that if successful, it would prove wrong the
criticism of cooperatives' poor performances."

Last week, Kanindo's management was taken over by its two
creditors, Bank Bumi Daya and Bank Pembangunan Indonesia
(Bapindo), both owned by the government, pending its acquisition
by a third party.

Kanindo, which runs a huge yarn spinning factory near Semarang
in Central Java, is on the verge of collapse after defaulting on
its more than Rp 500 billion (US$245 million) loan.

GKBI has been rumored as a potential investor into the group
along with Texmaco Group, a private textile company. Two powerful
businessmen, Johannes Kotjo and Kim Johannes, had been injecting
funds into Kanindo since Aug. 1 to keep the company afloat, but
stopped doing so when the two state banks took over the
management last week.

Kanindo's financial crisis first came under public scrutiny
earlier this year when Golkar legislator Bambang Warihkusumo
identified it as one of the 50 major companies which had bad debt
problems.

Bambang did not have the support from the Golkar faction in
the House of Representatives (DPR) to push the issue at the time.
News about Kanindo's collapse came only recently with the news of
an imminent takeover.

The situation was quite different in February when rumors
about the Kanindo fiasco first flared up. At that time leaders of
Golkar's faction in the House invited Robby to defend his record.

Robby, who made a big comeback into Indonesia's business scene
after serving time in the 1970s for smuggling luxury cars, left a
deep impression when, with tears in his eyes, he called the
allegations about his debts baseless and blown out of proportion
by his business rivals in an effort to discredit him.

Robby has been in Singapore since the scandal resurfaced,
apparently receiving medical treatment for a heart condition.

Fahmi Idris, chairman of Golkar's department of cooperatives,
yesterday brushed aside pessimism about GKBI's ability to manage
Kanindo.

He said GKBI needed to work together with other investors to
solve Kanindo's technical problems like bad debts and cash flows.

Fahmi, who is a businessman, said GKBI should seek partners
whose economic visions are more in line with Golkar's interests.
"Never mind if they are not Golkar members, but what counts is
that Kanindo must not collapse for the second time," he said.

GKBI control

According to the Antara news agency, Golkar wants to see GKBI
control most of the shares in Kanindo.

Warno and Fahmi declined to comment when asked if Golkar would
take any action against Robby if the attorney general's office
investigators found him in violation of the law, such as having
colluded with bank officials for the procurement of bank credits
as widely alleged.

"It's time to uphold business ethics and put this monkey
business to an end," Warno said.

When pressed why Golkar defended Kanindo when the allegations
first surfaced in February, Warno said that the denial was made
at the time when "the investigation was still underway."

"At that time Robby was serious about settling his debt ... he
is different now," Fahmi said. "The latest development shows that
he has failed to solve the problem."

Fahmi added that Golkar was still committed towards
establishing a clean government and would see to it that any
party breaching the rules be punished.

Golkar, he said, has asked the government to go ahead with its
investigation into the Kanindo affair and hide nothing.(pan)