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)