Minister in hot water over fraud allegation
The Jakarta Post, Jakarta
President Susilo Bambang Yudhoyono's Democratic Party called for the resignation of State Minister for State Enterprises Sugiharto on Monday, citing a number of alleged irregularities committed by the state minister.
The deputy chairman of the Democratic Party faction in the House of Representatives, Syarief Hasan, said his faction would send a letter to the President demanding the state minister's dismissal over alleged incidents of banking fraud he committed while in the private sector.
"His position in the Cabinet will tarnish the image of the entire administration. How can a man with a tainted record be given the responsibility to manage state-owned enterprises with total assets of Rp 1.200 trillion?" Syarief said here.
He said that if the state minister were allowed to continue in his position, it could compromise the restructuring of state- owned enterprises.
"This is a moral question. We need `clean' figures to sit in the Cabinet. We are concerned by the possibility of these state enterprises being plundered," he said.
The deputy chairman of the National Mandate Party (PAN) faction, Rizal Djalil, has also called on Sugiharto to step down to avoid becoming a liability for the Cabinet.
"Ministers should not be encumbered by their past," Rizal said.
The factions are seeking the state minister's resignation based on a widely circulated document from Bank of Indonesia that includes Sugiharto on a list of individuals barred from taking part in the banking industry until at least 2006.
Central bank authorities found in 1999 that Sugiharto violated "substantial" banking regulations. As a commissioner of private Himpunan Saudara 1906 Bank, he allegedly bypassed loan limits by channeling an extremely large loan through 11 financial institutions. This loan later turned into a bad debt.
Sugiharto also allegedly diverted a Rp 10 billion credit allocated for cement maker PT Semen Gombong to the vaults of his bank.
During the induction ceremony for his Cabinet, Susilo warned his ministers that they would be dismissed for any links to corruption.
Commenting on the allegations, Sugiharto said he never saw the Bank Indonesia document banning him from the banking industry and had only heard about the matter through the media.
When asked about his involvement with the private bank, Sugiharto said: "I was too busy to be active in the bank. I live in Jakarta and the bank is based in Bandung, West Java. I also never received a salary from the bank."
He said the bank's operations were overseen by a board of directors and commissioners other than himself.
Sugiharto said that in reality, he had helped save the bank from collapse and had wanted to resign his position but was talked out of it by the bank's management.