Investigation into Texmaco scandal halted

Investigation into Texmaco scandal halted

JAKARTA (JP): The Attorney General's Office has halted an
investigation into the high profile Texmaco Rp 9.6 trillion
(US$1.15 billion) alleged loan scandal due to lack of evidence.

Deputy Attorney General for Special Crimes Ramelan said here
on Friday the probe had been stopped because there was not enough
evidence that the state had suffered financial losses from the
loan transaction as confirmed by the testimony of experts from
the State Development Finance Comptroller or BPKP.

"This is a dilemma. But if there's no evidence of financial
losses to the state, this case can't be brought to court,"
Ramelan told reporters.

He pointed out that Texmaco, a giant integrated textile firm,
had provided more than sufficient collateral for the loan
channeled by state Bank Negara Indonesia (BNI).

Ramelan also said that there was no evidence of the
involvement of former president Soeharto in the loan transaction.

Meanwhile, director of the investigation Ris Sihombing also
said that there was no evidence that the loan transaction
violated banking rulings.

Former state minister of investments and state enterprises
development Laksamana Sukardi shocked the House of
Representatives in November last year when he accused Texmaco
founder Marimutu Sinivasan of colluding with Soeharto to force
BNI to channel the huge loan.

Laksamana said at the time that the loan transaction violated
the central bank legal lending limit ruling.

Marimutu was named a suspect in the case on Dec. 2,
immediately after Attorney General Marzuki Darusman received the
document on the alleged corruption case from Laksamana.

Laksamana was recently dismissed by President Abdurrahman
Wahid, who has been reshuffling the Cabinet to improve its
performance.

Meanwhile, Teten Masduki of the respected Indonesian
Corruption Watch lambasted the administration of Abdurrahman for
lacking a strong commitment to combating corruption, as evident
from the suspension of the investigation into the alleged loan
scandal.

"The reason to halt the investigation of the Texmaco case,
based on the result of the BPKP audit, is irresponsible,
considering that the credibility of BPKP is doubted," Teten said.

"We also suspect a high political conspiracy behind the
decision to issue the ruling (to halt the investigation) as part
of a plan to bail out the Texmaco group," he added.

Starting its business in the textile trade in 1962, Texmaco
has transformed into a large group of companies that manufacture
synthetic fibers, textiles, garments, textile machinery, machine
tools, trucks and small tractors and a wide range of other
engineering goods.

This range of consumer and capital goods, Texmaco chairman
Sinivasan says, are all the basic needs for a developing economy
like Indonesia's and are well positioned to become competitive
exports in the global markets.

Texmaco factories, including a 360,000-ton capacity purified
terephtalic acid factory in Karawang, West Java, are located in
several towns across Java.

Texmaco's engineering goods, such as textile machinery,
machine tools, automobile components, fabrics and garments have
entered markets in South Africa, Southeast Asia, the Middle East,
Europe and the United States.

The company said its fabrics were widely used by well-known
branded apparel makers, such as Marks & Spencer, Polo Ralph
Lauren, Tommy Hilfiger, Levi's and Nike.

Three Texmaco subsidiaries, PT Texmaco Jaya (textiles and
garments), PT Texmaco Perkasa Engineering (metals, machinery and
trucks) and PT Polysindo Eka Perkasa (synthetic fibers and
fabrics) are listed on the Jakarta Stock Exchange.

The group directly employs 50,000 workers and had a cumulative
export value of $900 million from 1997 to 1999. It also supplies
basic materials to 270 other companies with 150,000 workers.
(rei/01)