Maspion boss accused of illegal banking practice

The Jakarta Post, Jakarta

Police investigators are intensifying their probe into a possible case of illegal banking involving Surabaya-based Maspion Group, which has led to the detention of its president director Alim Markus.

National Police chief Gen. Da'i Bachtiar said on Wednesday the investigators will hear opinions from Bank Indonesia officials on the banking activities practiced by the company, which is known mostly as one of the largest domestic home appliance producers.

"We will question the central bank officials immediately as witnesses," Da'i said.

Police have been holding Alim since Saturday after they claimed to have obtained strong evidence of his role in the illegal practice within his company. The police said the firm had collected funds from the public "in the form of savings" without the consent of the central bank.

The police are charging Alim under Law No. 10/1998 on banking, and he could be imprisoned up to 15 years and/or fined Rp 200 billion (US$21.27 million).

In addition to Alim, the police have also detained three other Maspion executives -- finance director Willy Mulyawan and three other officials: Foo Tjin Yen, Kim Siang, and Pauline.

Alim's lawyer Humprey Djemat has questioned the police's decision to detain his client because there was never any questioning before being declared a suspect and without any initial cross-check with the central bank.

Aside from filing a temporary release from detention due to health concerns, Humprey also plans to file a pre-trial motion against the detention, which he said was illegitimate.

Da'i said Alim had the right to challenge the detention, but it was up to the investigators whether to detain a suspect.

The law justifies detention to facilitate the investigation, prevent a suspect from fleeing or destroying evidence.

Humprey said his client had complained about hypertension and had a record of strokes.

The police first got wind of the illegal banking after some distributors transferred money to the company as a down payment for Maspion products.

Maspion, explained Humprey, would deliver the products to the distributors within two to three months after the down payments were collected.

"If Maspion failed to deliver the products to the distributors on time, Maspion would pay compensation amounting to 10 percent to 11 percent of the downpayment," he said.

Humprey said that the practice was not illegal although the down payments were also later saved in a bank.

"This is simple business, and is common between a company and distributors. Besides, the accusations are ridiculous. Alim is the president director of the 30-year-old company that employs over 13,000 people. He is a public figure and renowned businessman," he added.

Maspion is believed to have been collecting at least Rp 50 billion (US$4.78 million) from its 45 distributors since 2001.

Founded in 1962, Maspion has grown as one of the world's largest consumer durable good producers, with products ranging from kitchenware, plastic houseware and glassware to electronic home appliances.

It has production facilities spread across four industrial areas in Sidoarjo and Gresik, East Java, and a factory in Jakarta.

The company also supplies some well-known retail stores and wholesalers in other countries, including the United States.