Probe into gold bullion company widened after arrest

JAKARTA (JP): Police will widen their probe into PT Pan Bullion Prima, a private gold bullion trading company, after the executive director was named a suspect.

National Police spokesman Brig. Gen. Da'i Bachtiar said yesterday that investigators would start questioning other executives and staff members as potential witnesses to alleged breaches of the firm's business permit.

"There is always a possibility that other employees might have been involved in the crime," he added.

Da'i said the company's executive director, identified only as JS, was officially named a suspect last week.

"JS is accused of abusing the business permit in his capacity as the person responsible for the company. The company has operated more like a bank than a regular trading company."

He said the action had violated Article 46 of the 1992 Banking Law No. 7 which stipulates a maximum of 15 years in jail and Rp 10 billion (US$833,333) in fines.

The company's headquarters at Plaza Bapindo on Jl. Jend. Sudirman in South Jakarta has been temporarily closed since Jan. 20, the spokesman said.

And JS was arrested a couple of days prior to the closure.

Da'i said the company received deposits from its customers in the form of gold bullion or money and promised to pay the customers interest.

"That's against its business permit. The company should have had a license from the Ministry of Finance if it wanted to operate such bank-like activities."

He said it had functioned like a bank since 1991.

JS was arrested after some customers reported to police the company's failure to pay interest on their gold bullion deposits.

"His company has failed to pay the interest or return about 400 kilograms of gold bullion, valued at about Rp 11 billion, to some 430 customers."

The company's failure to meet its obligations to customers was apparently linked to the monetary crisis which has effected the price of gold, Da'i said.

JS could be punished for the company's breaches, he said.

"JS could be accused of cheating and defrauding the customers by failing to fulfill his responsibilities."

He said police were preparing to charge JS under articles 372 and 378 of the Criminal Code on deception and fraud.

If found guilty, he could face a maximum of four years in jail or a fine of Rp 60.

He said the court would decide what to do with the company's assets and how to pay out the customers. (cst)