Police release Indian businessmen

The Jakarta Post, Jakarta

Two high-profile Indian businessmen controversially detained by police were released into the custody of the Indian Embassy on Friday, National Police said.

"We released them at 9:30 a.m., but we confiscated their passports to prevent them from leaving the country," National Police deputy spokesman Sr. Comr. Zainuri Lubis said.

Arun Jain, chairman of Polaris Software India Ltd, and Rajiv Malhotra, the company's senior vice president, are required to report to police twice a week.

An official at the Indian embassy in Jakarta told Reuters that it was still unclear if the two had to remain in the country while police probed a commercial dispute that led to their detention last week after a complaint by a Polaris client in Indonesia.

The pair were arrested on Dec. 13, allegedly for committing deception and embezzlement causing Bank Artha Graha, belonging to an Indonesian Army foundation, to suffer huge financial losses.

Zainuri said the men would likely face further questioning as the case proceeded.

"We freed them as the charges only carry a maximum five-year jail term," Zainuri said referring to the Criminal Code.

"We detained them simply to prevent them from leaving the country due to their status as foreigners."

He played down suggestions the release was due to high-level pressure from the Indian government on the Indonesian government.

India's Foreign Minister Yaswant Sinha was reported by AFP to have phoned Indonesian Foreign Minister Hassan Wirayuda over the matter which has received widespread condemnation in India.

Jain and Halhotra were in Jakarta to look into the termination of a contract to install a US$1.3 million software system at Artha Graha. The bank has demanded $10 million in compensation for failure to fulfill the contract.

Foreign businessmen have questioned the lack of legal assurance in the country due to the poor legal system and corrupt law enforcement officials.

Canadian-based Manulife Financial Corp. was declared bankrupt by the Central Jakarta Commercial Court in June. The decision was later overturned by the High Court while the judges were suspended for corruption. The judges' fate remains unclear.