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)