Tansil gets `only' 17 years in jail

JAKARTA (JP): Businessman Eddy Tansil, the man at the center of the Rp 1.3 trillion (US$620 million) loan scandal at the state-owned Bank Pembangunan Indonesia (Bapindo), was sentenced to 17 years in prison by a Jakarta court yesterday.

The court also ordered Tansil, the 40-year-old owner of the Golden Key Group, to pay the government Rp 500 billion ($238 million) in restitution and fined him an additional Rp 30 million.

"We find Eddy Tansil guilty of having caused a great financial loss to the state," said chief of the Central Jakarta District Court Soetrisno who presided over the trial. "We hereby sentence you (Tansil) to 17 years imprisonment."

The court's public gallery was silent for a while, but when the verdict sank in, pandemonium broke out as people expressed surprise and disappointment at the light term.

The public prosecutors too were taken aback by the court's verdict which was far short of the life imprisonment they had been seeking. Most observers had also expected that the court would at the very least give 20 years.

The prosecutors, anxious to retrieve as much money as possible for the government, had also asked the court to order Tansil to pay Rp 800 billion.

"It is likely that we will appeal," Lukman Bachmid, the chief prosecutor told reporters after the hearing.

Lukman tried to hide his disappointment. "It is common in any trial that the verdict does not meet our expectations."

The court yesterday ordered the government to return some of the assets it had confiscated from Tansil, but allowed it to keep the goods believed to have been purchased with money swindled from Bapindo. They include various properties and also bank deposits.

National security

Judge Soetrisno rejected the prosecution's suggestion that Tansil's behavior had gone as far as to threaten national security. His action, however, caused a loss to the government sufficient to warrant indictment under the 1971 anti-corruption law.

Tansil became the second person to be indicted in connection with the huge loan scam at Bapindo. The first was Maman Suparman, formerly deputy manager of Bapindo's Jakarta branch, who handled Tansil's loan accounts with the bank. Maman was given a nine-year prison term.

Four former Bapindo directors who were in charge of the bank between 1989 and 1993 when the scandal took place, have also been charged. They are Subekti Ismaun, Towil Heryoto, Sjahrizal and Bambang Kuntjoro.

The court yesterday said that Tansil was guilty of embezzling $448 million from the government-owned bank.

Tansil had secured a total of $477 million in loans from Bapindo to finance the construction of a huge petrochemical project in Cilegon, West Java. He owed this to Sudomo, then a powerful cabinet minister, who gave him a letter of reference to support his loan applications.

Tansil managed to cash in on nearly $448 million of the loans by converting the terms of his letters of credit from usance to red clause ones. He also managed to name his own company in Hong Kong as the beneficiary in place of the original foreign suppliers. He did all this with the help of Bapindo insiders.

The conversion from usance to red clause is a rare practice and carries high risk.

"You are found in contempt of the banking regulation," Judge Soetrisno told the defendant. "Your action has tarnished the image of Indonesia's banking system."

Soetrisno also said Tansil had misused the reference letter he obtained from Sudomo, currently the chairman of the Supreme Advisory Council.

Tansil's chief defense counselor, Gani Djemat, told reporters after the hearing that his team will discuss the verdict with his client before deciding whether or not to appeal.

Yesterday Gani was accompanied by Humphrey R. Djemat, his son, Soetarno Soedja, FXL Soewadi and Sintok Singh. (02)