The Maspion arrests, harassment or good law enforcement?

The Maspion arrests, harassment or good law enforcement?

NEWS ANALYSIS

Riyadi Suparno
The Jakarta Post/Jakarta

What a surprise. Alim Markus, a Surabaya-based tycoon who is best
know for his clean record and successful businesses, was detained
by the police for on dubious criminal charges.

It all began two weeks ago when National Police officers
arrested three employees of PT Maspion -- Fo Tjin Yen, alias
Yeyen, Kim Siang and Pauline -- in Surabaya and took them to
Jakarta for interrogation.

Following the arrests of his employees, Alim Markus, chairman
of the Maspion Group -- one of the largest domestic kitchenware
makers -- went to police headquarters in Jakarta on Friday, May
20, to seek clarification, only to find himself arrested and
detained.

The police have repeatedly claimed that Alim Markus was
detained as a suspect for illegal banking practices. The charges
say Maspion had been collecting funds from the public without the
consent of the central bank.

Maspion is believed to have collected more than Rp 50 billion
(US$4.8 million) from 45 parties since 2001. The police, as
reported by the media, claimed that 80 percent of the money had
been used as working capital and the remaining was deposited at
Bank Maspion, also owned by Alim Markus.

However, Alim's lawyer challenged the police claim, and argued
that the 45 parties were all Maspion distributors and the money
was paid as a down payment for Maspion orders -- which is a
common practice anywhere between a manufacturing company and its
distributors.

Maspion, according to the lawyer, promised to deliver the
products within two to three months, but if Maspion failed to
deliver the products on time, it would compensate the
distributors with interest at the rate of 10 percent to 11
percent per annum.

Claims and counter-claims are all acceptable, but the
seemingly haphazard detention of Alim Markus has raised some
questions. What are the real motives behind his arrest and
detention.

If people look at Maspion's track record, most would likely
see other motives behind arrests.

Founded in 1962, Maspion has grown into a large conglomerate
of businesses producing a wide range of consumer durable products
-- a total of over 8,000 items -- ranging from kitchenware to
electronic home appliances.

The group also exports many of its products overseas,
including the Untied States. Overseas sales account for around
US$200 million per annum.

The group now has 50 plants operating under 36 subsidiaries,
including two publicly listed companies: PT Aluminum Light Metal
Industry (ALMI) Tbk. and PT Indal Aluminum Industry (Indalex)
Tbk. The group employs a total of 23,000 people.

When Maspion closed down two of its plants, none of the 1,700
employees in the two plants were laid off. When thousands of its
workers rallied, demanding better pay, Alim Markus himself
stepped in and met the demonstrators and hammered out an amiable
solution.

Most importantly, the group is one of a few business groups in
Indonesia that was able withstand the economic crisis without
taking taxpayers' money. None of its subsidiaries have defaulted
on any bank loans.

Thus, Rp 50 billion would seem to be peanuts for a giant like
Maspion.

Assuming that the police are correct in the claim that Maspion
was using 80 percent of the money deposited by customers as
working capital, it is still not enough to consider them
criminals. It is still debatable whether the practice is even a
criminal case or just a civil case. It may violate regulations,
but violating a regulation is not necessarily a crime, especially
when no one loses a single rupiah and no one is hurt in any way.

Interestingly, the police have not sought the opinion of the
central bank regarding the Maspion case. And yet, it has
arbitrarily arrested Alim Markus.

One of the problems might be because Alim Markus used to be
active in politics and was seen at political gatherings where
then president Megawati Soekarnoputri was campaigning for
reelection.

Another problem might be because Maspion is a big business
group with deep pockets -- a tempting situation for certain
parties wishing to exploit their wealth. A source at Maspion said
they had already spent a lot of money to "serve various parties."

If such a successful company like Maspion could be harassed
like this and a noted and respected businessman like Alim Markus
can be so easily detained, it would send a strong negative
message to the business community in this country.

Already, some businesspeople in East Java have a running joke
that if they do not "cooperate" with the police, they could
become another Maspion -- or di-Maspion-kan.

Local businesspeople warned that the tactic by the police
against Maspion and Alim could easily drive away investors. They
fear that Maspion, itself, will relocate production facilities to
other countries.

The businessmen like Dahlan Iskan of the Jawa Pos group has
rallied behind Alim Markus, demanding the police to release him.
Following assurances from fellow businessmen and many others --
including retired police officers -- the police downgraded Alim's
detention status to city detention, so at least he is now free as
long as he does not leave Surabaya.

We can only hope that the police are genuine in this case
against Maspion and Alim Markus. If they are true and genuine and
crime was committed, then their move would not drive away
investors, but instead would attract them as it could be seen as
a sign of good law enforcement. But we will have to see how it
all plays out.