Tue, 02 Aug 1994

Second Bapindo director arraigned over loan scam

JAKARTA (JP): A second former director of Bank Pembangunan Indonesia (Bapindo) was arraigned in court yesterday in connection with the Rp 1.3 trillion ($620 million) loan scam at the government bank.

Subekti Ismaun, 55, who was the bank's president between 1989 and 1992, was charged with corruption at the South Jakarta District Court.

The state prosecutors said Subekti, in collaboration with three other former directors, or separately, enriched himself, or helped other people to enrich themselves, causing the government to lose money.

He is the fourth suspect to be brought before the court in connection with the loan scandal. Maman Suparman, formerly deputy manager of the bank's Jakarta branch, was jailed for nine years; Eddy Tansil, the businessman to whom the loans were issued, could face life imprisonment; Towil Heryoto, also a former Bapindo director, is still on trial in the same court.

Subekti headed the bank's board of directors during which most of the crucial decisions to grant the loans, and then extend them, were made.

The prosecution said Subekti failed to use his authority to coordinate and supervise properly the loans extended to Tansil or even to rectify the situation when it became apparent that something was wrong.

As a result, he allowed Tansil to misuse the loans, originally intended to finance a giant petrochemical project in Cilegon, West Java, for personal interests.


"His actions directly caused the state to lose $449 million (Rp 962 billion)," chief prosecutor Tarwo Hadi Sadjuri said when reading the indictment.

If found guilty under the 1971 anti-corruption law, he could be facing a maximum of life imprisonment.

Two colleagues on the Bapindo board of directors, Sjahrizal and Bambang Kuntjoro, are also in the custody of the Attorney General's Office and are awaiting for their trials to begin.

Subekti, wearing a brown batik shirt, appeared almost relaxed when he turned up at the court for the arraignment. He was listening attentively as the prosecutors took turns reading the 78-page indictment. He even occasionally made notes on a piece of paper.

As soon as the prosecutors finished, he was ready with the paper to respond to the indictment, but Judge Soedjatman decided to adjourn the hearing for one week to allow the defendant and his lawyers to prepare their defense.

According to the prosecution, Subekti, as the bank's president director and a member of board of directors, ignored standard banking regulations and requirements in approving Tansil's credit applications.

The credits were issued to finance the purchase of machinery and equipment for Tansil's huge petrochemical projects in Cilegon, West Java.

The prosecution also stated that on June 12, 1989, Tansil met with Subekti for the first time in connection with his credit application. Tansil was carrying a letter of reference from Sudomo, the then minister of political affairs and security and now the chairman of the Supreme Advisory Council.


Subekti and the other three directors earlier testified at the trials of Tansil and Maman that the letter of reference from Sudomo influenced their decision to extend the loans without subjecting Tansil's application to the usual scrutiny.

The prosecution also blamed Subekti for allowing Tansil to tap the loans before a formal credit agreement was signed.

Subekti is also charged with failing to act when he could have cut Bapindo's losses from dealing with Tansil in June 1992. The prosecutors said that instead he, with the other members of the board of directors, decided to let Tansil cash in on all the agreed loans.

Subekti and the other directors claimed that their initial decision to cut their losses was overruled by J.B. Sumarlin, the finance minister at that time, who was also the bank's chief commissioner.

Sumarlin, now the chairman of the Supreme Audit Board, has denied that he intervened in the decision. (05)