Probe into corruption in steel mills sought
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."