Gunung Agung to sue Jagata over bank scam

Gunung Agung to sue Jagata over bank scam

JAKARTA (JP): PT Gunung Agung and Group will sue PT Jagata
Primabumi over a Bank Arta Prima debacle which has resulted in
the arrest of five executives from the former and one from the
latter, lawyers said yesterday.

Gunung Agung's lawyers have accused Jagata Primabuni of not
fulfilling the obligations it undertook when taking over Bank
Arta Prima from them.

"We lost Bank Arta Prima but still have the burden. But it's
not over. We will sue Jagata Primabumi because it acquired the
bank without fulfilling its obligations," said Denny Kailimang
from Rudhy A. Lontoh, Denny Kailimang and Associates law firm.

Denny was accompanied by Lego Nirwhono, chairman of Gunung
Agung and Group.

Meanwhile, Attorney General Singgih said here yesterday he
would let the police work on the case before his party moved in.

"When it involves corruption, we have to take quick action,"
Singgih said.

National Police Chief Lt. Gen. Dibyo Widodo said he would
fully back the Jakarta police in their efforts to uncover the
scam.

Gunung Agung and Group, founded by the late H. Masagung in
1953, was taken over by PT Kosgoro and PT Trimuda in 1994 when it
ran into financial trouble, which then caused financial problems
for Bank Arta Prima.

To solve the problem, Gunung Agung's new shareholders decided
to sell Bank Arta Prima on condition that the new investors took
over all Gunung Agung debts to Bank Arta Prima and other
financial institutions, Lego said.

The debts included Rp 100 billion (US$41 million) swap
facilities, Rp 87 billion direct financing -- both from Bank Arta
Prima -- and Rp 174 billion from other financial institutions.

Those willing to acquire Bank Arta Prima included Kim Johannes
Mulia and Bank Artha Graha, Denny said.

"We actually preferred Artha Graha because it had money, but
the central bank directed us toward Kim Johannes," Denny said.

Gunung Agung entered negotiations with Kim Johannes who
promised the President Soeharto-chaired Dharmais Foundation as
his partner.

Kim agreed to all conditions set by Gunung Agung, Denny said.

Kim, with Jeffie Geovanie and Hedijanto, an executive at
Dharmais but acting in his personal capacity, formed PT Jagata
Primabumi to acquire Bank Arta Prima.

As Kim did not have fresh money he asked Gunung Agung to issue
commercial papers (promes) worth Rp 174 billion to pay off Gunung
Agung's debts to various financial institutions, Denny said. The
papers were underwritten by Bank Arta Prima.

Kim also asked Gunung Agung to issue commercial papers worth
Rp 150 billion, underwritten by Bank Arta Prima.

"We agreed to issue them because Kim promised to settle them
all, this was in the agreement," Denny said.

Rudhy said Gunung Agung and Jagata Primabumi signed the
agreement on July 27, 1995.

With the consent of Bank Indonesia, Jagata Primabumi as the
new investor, reshuffled Bank Arta Prima's management on July 28,
1995, Rudhy said.

Jagata Primabumi converted commercial papers worth Rp 107
billion into Bank Arta Prima's capital to artificially increase
it to about Rp 207 billion from about Rp 100 billion.

Jagata Primabumi, then sold Bank Arta Prima to Bank Artha
Graha, which reported the promes scam to police.

"We have had no involvement with Bank Arta Prima since July
27. Then suddenly our people were arrested on charges of
sabotaging the bank by issuing fake promes," Rudhy said.

He said Made Oka Masagung, the former main shareholder and now
adviser of Gunung Agung, was arrested by police on May 5 at
Jakarta's Soekarno-Hatta airport as he arrived back from
Singapore.

But the arrest order was not issued until the following day by
Jakarta's Police Chief of Detectives Col. Gories Mere.

The police then arrested Chaidil Aini, Husni Ali Thaqil --
respectively president and director of Bank Arta Prima until July
27, 1995 -- and Hari Suhalim and Marul Maulana -- both former
commissioners of the bank.

The police also arrested Kim Johannes.

Jakarta Police Chief Maj. Gen. Hamami Nata said the six men
were involved in a scam worth Rp 1.2 trillion (US$516 million)
consisting of Rp 324 billion of commercial papers underwritten by
Bank Arta Prima and Rp 700 billion in bad credit.

Hamami said police believe Kim was the mastermind behind the
crime.

Lego said he had sought house arrest for his clients but so
far to no avail. He said his clients should be cleared of all
charges as the offenses happened after Gunung Agung transferred
Bank Arta Prima to Jagata Primabumi.

But Gunung Agung would take over the commercial papers worth
Rp 174 billion to maintain public confidence in the company, Lego
said.

"We have asked the holders of our commercial papers to refer
to us, we will take over responsibility (from Jagata Primabumi),"
Lego said.

Lego yesterday also dismissed claims that a Gunung Agung
subsidiary, identified by police as company "X", had defaulted on
loans of up to Rp 700 billion from Bank Arta Prima. (rid/cst)