Indover creditors may be named as suspects

JAKARTA (JP): State prosecutors could name several businessmen as suspects in the loan scandal involving two of Bank Indonesia's (BI) foreign based subsidiaries, an official said on Friday.

Head of the team investigating the scam, Muchtar Arifin, said the prosecutors found indications of misuse of the loans by the creditors which allegedly caused the central bank some US$1 billion in losses.

"Besides procedural violations in granting the loans, we have also found that the loans may have been misused.

"Therefore, the creditors can be named as suspects," he said.

The Attorney General's Office named former president director of Amsterdam-based N.V. Indover Bank, Sidharta S.P. and former managing director of the bank's Hong Kong-based affiliate, Indover Asia Ltd., Permadi Gandapraja as suspects last August.

The two have been accused of violating the bank's prudential principals by disbursing loans without properly examining the lenders' capability to repay.

The money distributed by the two banks came from, among other sources, BI's foreign exchange reserves.

Muchtar said the team would question the creditors, including former Supreme Advisory Council chief A.A. Baramuli over some of the credits which were extended to a certain company.

"We'll ask Baramuli for clarification since there is a connection between him and the creditor," he said.

He said the company belonged to Baramuli's wife, who reportedly received US$1.5 million.

However, Muchtar said they had not received approval from the President to question Baramuli, who is a member of the People's Consultative Assembly (MPR).

The prosecutors again questioned former BI governor Soedradjad Djiwandono on Friday about the loan disbursements.

Muchtar said the team found the case difficult to be solved since Soedradjad was both the BI governor and the commissioner of Indover Bank when the alleged corruption took place between 1993 and 1998. Soedradjad had full authorization to make the loan arrangements.

"We have to consult legal experts over whether it was proper for the central bank governor to become commissioner of the bank's subsidiaries," he told journalists. (bby)