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)