Singgih says he will act on Kanindo if crime perceived

Singgih says he will act on Kanindo if crime perceived

JAKARTA (JP): Attorney General Singgih said yesterday his
office will investigate the Rp 500 billion ($238 million) loan
scandal at the Kanindo textile company only if it has any cause
to believe a crime has taken place.

"I can't tell you now whether or not there are indications of
criminal aspects in the debt scandal at Kanindo," Singgih told
reporters yesterday.

The Attorney General has been criticized for holding back on
investigating the alleged fraud at Kanindo which has come under
the national spotlight as details continue to unfold.

Kanindo, which owns a yarn spinning facility in Central Java,
has defaulted on Rp 500 billion in debts owed to two state-owned
banks, Bank Bumi Daya (BBD) and Bank Pembangunan Indonesia
(Bapindo).

The company is owned by Robby Tjahjadi, a controversial
businessman, who made successful a comeback onto the Indonesian
business scene after serving prison time for smuggling luxury
cars in the early 1970s.

It has now become apparent that Robby marked up the value of
an imported spinning machine in an attempt to bolster the size of
the loans. Robby has been out of the country since the scandal
was unveiled. He is now believed to be in Singapore.

The two state banks have now been given the green light by the
government to take over the management of the company.

Two companies, the Texmaco group and the Association of Batik
Cooperatives (GKBI) have shown an interest in acquiring the
shares of Kanindo.

Singgih said that his office has not remained silent on the
case and has been active in gathering data and information
related to the Kanindo debt scandal.

"We won't launch an investigation if the data and information
do not show any crime has been committed," Singgih said, adding
that if no crime has occurred the problem can be settled by the
Ministry of Finance.

Singgih declined to explain whether or not Robby's marking up
of the project's value amounted to a crime.

"The most important thing is that we will handle the case if
there are indications of crime," Singgih said.

He said his office is moving with caution given the complexity
of the case, but stressed that there will be no special treatment
for Robby.

Singgih said the Attorney General's Office is working closely
with the Directorate General of Customs and Excise in
investigating reports that a businessman who is involved in
rescuing Kanindo, forged export documents in his application for
a loan from Bapindo.

Kim Johannes has raised loans from Bapindo which he used to
inject into Kanindo to keep the company afloat.

He and another noted businessman, Johannes Kotjo, has been
injecting Rp 850 million ($390,000) a day into the firm since
Aug. 1, as negotiations continued for its takeover. (02)