Thu, 28 Aug 2003

Perhutani president grilled over alleged scams

Damar Harsanto, The Jakarta Post, Jakarta

The president director of ailing state-owned forestry firm PT Perhutani, Marsanto, was questioned by police on Wednesday as a witness in two corruption cases.

The company's director of planning and development, Bambang Aji, was questioned on Wednesday as a suspect in both cases.

"We suspect him in two separate corruption cases that caused massive losses to the state," said a police source.

The source said the first case was related to several PR projects being carried out by Perhutani. The projects, costing Rp 43.4 billion, were part of efforts to improve the company's corporate image.

Police allege the projects were never implemented and were created solely to siphon off the company's net profit of Rp 111 billion. The projects were announced after the government issued a decree converting the company from a non-profit to a profit- oriented firm.

Most of the projects never materialized and police believe the money earmarked for them was embezzled, the police source said.

The source said the second corruption case involved Perhutani's joint project with German-based Global Marketing for the marketing of its products.

"The management stopped the project before it was fully materialized, claiming it was a failure.

"As the president director, Marsanto was in a position to be aware of the projects. But we have no witnesses to confirm the allegations. That is why we are still interrogating him (Marsanto) as a witness," the police source said.

The source said those in the firm were being tight-lipped over the cases, making the investigation difficult.

Perhutani's status was changed from a non-profit firm to a profit-oriented one in 2001 during the administration of president Abdurrahman Wahid.

The move was aimed at lifting the cash-strapped company out of financial difficulties, which owed to the shortage of timber on Java and Madura. Perhutani manages forest areas on both islands.

The government reversed Perhutani's status back to that of a non-profit firm after the Supreme Court annulled the previous government decree.