Rp 2.7 trillion lost at state-owned firms

Rp 2.7 trillion lost at state-owned firms

Rendi A. Witular, The Jakarta Post, Jakarta

Recently disclosed alleged irregularities at 16 state enterprises
may have caused more than Rp 2.7 trillion (about US$287 million)
in state losses, a report from the Office of the State Minister
for State Enterprises says.

Leaked to a number of media outlets over the weekend, the
report says of the total amount of allegedly abused funds, Rp
1.36 trillion came from three publicly listed firms: Bank Rakyat
Indonesia (BRI), gas utility firm PT Perusahaan Gas Negara (PGN)
and pharmaceutical firm PT Indofarma.

The report found potential losses of some Rp 815 billion at
BRI, which just replaced its president director, Rudjito.

The alleged losses at BRI are connected to two cases. The
first involves suspected irregularities in the channeling of
loans worth over Rp 745 billion in 2001 to the Domba Mas Group,
which is in the plantation business. The second involves alleged
kickbacks of Rp 70 billion for the installation of information
technology systems at the bank.

A source at the state minister's office said the alleged loan
irregularities at BRI had been reported to the government's
anticorruption team, while the alleged procurement kickbacks had
been reported to the Corruption Eradication Commission (KPK).

"The Office of the State Minister for State Enterprises has
not yet replaced the executives (at BRI) because we are still
focusing on replacing the president directors at all state
enterprises," the source said.

BRI's newly installed corporate secretary, Suprajarto, denied
the accusations and pledged to clarify the matter soon.

The state minister's office also disclosed possible
irregularities at PGN in its Rp 500 billion investment in mutual
funds, and alleged procurement kickbacks worth Rp 45 billion at
Indofarma. The office is still conducting internal investigations
of the two firms based on reports from the State Development
Comptroller and the Supreme Audit Agency.

According to sources, State Minister for State Enterprises
Sugiharto has asked President Susilo Bambang Yudhoyono to issue a
presidential regulation on the protection of witnesses to
encourage people to report corruption at state enterprises and
other institutions.

Sources at the State Secretariat said the regulation was
likely to be issued shortly after the President arrived back from
trips to the U.S. and Japan next month.

Many, if not most, state firms in the country are known to be
poorly managed and to suffer from low rates of return on
investments, due mostly to corruption and intervention by vested
interests -- which often regard the companies as cash cows for
their own personal use.

As of last year, there were a total of 158 state firms with
combined assets of Rp 1,200 trillion.

The Attorney General's Office is currently investigating
alleged lending irregularities worth some Rp 12 trillion at
publicly listed Bank Mandiri, the nation's largest lender.

The KPK, meanwhile, is expected to start looking into alleged
procurement kickbacks in the installation of information
technology systems at publicly listed Bank Negara Indonesia
(BNI).

The case dates back to 2002 when BNI was under different
management and is said to involve some Rp 98 billion.