Minister in hot water over fraud allegation
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.