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.