Probe into corruption in steel mills sought
The Jakarta Post, Jakarta
Around 200 students and activists staged a demonstration at National Police Headquarters on Tuesday, demanding the police investigate an alleged financial scandal involving three steel mills of the Gunawan Steel Group in the East Java capital of Surabaya, believed to have caused more than Rp 1.2 trillion in state losses.
"The police must look into the financial scandal, which is similar to the one that involved businessman Eddy Tanzil, who is still at large. Beforehand, the police should bar the steel group's head Gwie Gunawan alias Gwie Sie An from leaving the country so that he is available for questioning immediately," said M. Arief who led the demonstration.
The students and activists aired similar demands to the Attorney General's Office and the House of Representatives in a rally here over the weekend.
Arief, also coordinator of the Committee to Monitor State Assets, said the police had to reopen an investigation into the scandal as the steel group had apparently retaken control of three steel mills seized in 1998 by the Indonesian Bank Restructuring Agency (IBRA) as collateral against the Rp 1.45 trillion (US$159.70 million) it owed to Bank Mandiri and the now- liquidated Bank Bali.
He said the Gunawan Steel Group bought the three mills for Rp 185 billion via three companies that are believed to be owned by the Gwie family, with the help of allegedly corrupt members of the East Java legislature and former IBRA employees.
He said the three steel mills were seized by IBRA over the steel group's inability to repay its huge debt to the two banks, but were later sold under the agency's asset-sales program to two companies believed to be owned by the same group.
PT Gunawan Dian Steel Pipe (GDSP), with Rp 453 billion credit, was sold for Rp 27 billion to PT Bina Kreasi Prima Niagatama, while PT Gunawan Iron Steel (GIS), with Rp 234 billion credit, was sold for Rp 14 billion to (Bina Kreasi). PT Gunawan Dianjaya Steel (GDS), with Rp 762 billion in defaulted loans, was sold for Rp 144.8 billion to PT Parma Iriando Perkasa.
Arief added that the two firms that bought the three troubled companies belonged to the Gunawan Steel Group, "and this violates regulations on asset sales conducted by the government."