House members grill Tommy over clove monopoly

House members grill Tommy over clove monopoly

JAKARTA (JP): The youngest son of former president Soeharto,
Hutomo "Tommy" Mandala Putra, was grilled on Monday by members of
the House of Representatives over an alleged manipulation of
clove farmers' money at the now defunct Clove Marketing and
Buffer Stock Agency (BPPC).

Darul Siska, the head of the special team of House Commission
V in charge of trade and industry, said that Tommy, the chairman
of the dissolved clove trade monopoly was asked to clarify the
charge that the agency did not return part of the money kept by
the farmers at the agency.

"But Tommy denied the charge," he said.

Tommy told the closed meeting that the agency had no unsettled
obligation because it had paid back the entire Rp 1.1 trillion
(US$152 million) in funds the agency collected from farmers to
the concerned parties right after it was dismantled by the
government in mid-1998.

However, according to the Primary Cooperative Association
(Inkud), BPPC has still not paid Rp 175 billion, including Rp 107
billion in bank loan interest and Rp 46 billion in depreciation
costs of Inkud's clove procurement.

Tommy refused to comment on the allegation to the dozens of
journalists waiting patiently outside the room during the closed
hearing session.

"But, he said he would try to settle the misunderstanding with
Inkud through consensus. He said it was only a matter of
misinterpretation of the contract," Darul told the media after
the hearing.

Darul said the commission had suggested both parties bring the
dispute to court if they failed to achieve an agreement on the
problem.

A member of the special team, Azwir Dainy Tara, said they had
asked Tommy to "listen to his conscience" and pay back the
obligation.

Azwir said it was important for BPPC to return the funds to
Inkud so that the latter could deliver the money to the eligible
clove farmers, who had been asking for their money.

BPPC was a private institution appointed and granted a clove-
trading monopoly by the Soeharto regime in early 1991.

Under the system, farmers were required to sell their cloves
to the agency through the primary cooperatives Inkud and Puskud.
The agency then sold the cloves to producers of clove blended
cigarettes under a compulsory purchase arrangement.

The government set the floor price for standard-quality cloves
at Rp 8,000 per kilogram. However, farmers only received Rp 5,000
per kilogram for cloves they sold to BPPC. The agency kept the
remaining Rp 2,000 as equity shares in cooperatives and
transferred Rp 1,000 to a special account for crop
diversification funds.

BPPC was dismantled in mid-1998 after Soeharto agreed earlier
that year with the International Monetary Fund (IMF) to liberate
the clove-trading monopoly. The IMF had made the scrapping of
clove-trade monopoly a prerequisite for a $43 billion bailout
package to salvage Indonesia's ailing economy.

During its time, BPPC held a stranglehold on the clove trade
and collected Rp 1.1 trillion in revenue from clove farmers. In
May 1998, Hutomo symbolically transferred the Rp 1.1 trillion
fund to Inkud. At the same time, he also sold his entire business
arm PT Humpuss' stake in wholesaler Goro to Inkud.

The hearing between the special team and Tommy, which included
former BPPC secretary general Yance Worotijan and president of PT
Humpuss Abdul Wahab, was marred by a shooting incident.

A tiny hole, believed to be the result of a shooting, was
found in a window in an alley adjacent to the secretariat of
Commission V.

Witnesses said they heard a blast and spotted a crack in the
window just a couple of minutes after Tommy and his friends
passed the alley and entered the room where the hearing was held.

Another incident occurred when the tight-lipped Tommy made his
way out of the building as dozens of workers, who had just
arrived for a protest against improper labor treatment by their
factory, harassed him with harsh words and tried to block his
car.

Darul said his team did not know whether the shooting was
aimed at putting pressure on them, but insisted that team members
were not scared off by the incident.

Darul added that since the hearing had not satisfied the team
due to its indeterminate results, the commission would hold
another session with BPPC and the other concerned parties.

He said the commission would soon summon Inkud chairman Nurdin
Khalid who did not show up at Monday's session because he was in
Mecca performing the haj, as well as former Minister of
Cooperatives and Small Enterprises Subiakto Tjakrawerdaya and
Goro's owner Ricardo Gelael. (cst)