Tommy denies car program fueled by graft

Tommy denies car program fueled by graft

JAKARTA (JP): The Attorney General's Office questioned former
president Soeharto's youngest son Hutomo "Tommy" Mandala Putra
for more than three hours on Monday over the defunct national car
program.

Hutomo denied allegations the widely criticized project was
corrupt and designed to enrich the ruler's family.

"I think it was not an abuse of power because everything has
been done in accordance with procedures and for the interest of
the nation," Hutomo said after the questioning.

Tommy's lawyer Soedjono said Monday's questioning over the
national car program was the first for Tommy and that he would be
requestioned on Wednesday.

Attorney General Andi M. Ghalib told the House of
Representatives in December that the national car program, as
stipulated in Presidential Decree No. 42/1996, was nepotistic
because it was contrived solely to profit the Soeharto family.

Ghalib stated the program, run by Tommy's PT Timor Putra
Nasional, caused the country US$1.55 billion in losses.

Timor was the sole recipient of an import duty and luxury tax
exemption from late 1996 until January 1998, when the
International Monetary Fund insisted Indonesia stop the
preferential treatment.

Thanks to the exemption, the car was 60 percent cheaper than
its competitors on the domestic market.

Timor was supposed to increase its local content by 20 percent
annually until it reached 60 percent in the third year. In the
first year, it was waived pertaining taxes in the import of
Sephia cars from South Korea's Kia Motors Corp.

Ghalib said the Timor project's exemption from luxury tax and
import duty cost the government Rp 1.05 billion.

The government has demanded Timor repay Rp 3.39 trillion ($376
million) for exempted import duties on about 39,000 imported
cars.

It argues Timor did not fulfill the local content stipulation.

The state also suffered $500 million in losses from syndicated
bank loans given by 13 state and private banks to finance Timor's
manufacturing plant, Ghalib said.

Former industry and trade minister Tunky Ariwibowo, who issued
the ministerial decree in February 1996 authorizing Timor to
execute the national car program, former investment minister
Sanyoto Sastrowardoyo and former finance minister Mar'ie Muhammad
are among those who have been questioned by the Attorney
General's Office.

Hutomo was slapped with city arrest for 20 days last Friday --
barring him from leaving Jakarta without permission from
authorities -- pending trial for his alleged involvement in a Rp
96 billion land scam.

Other suspects in the case, former chairman of the State
Logistics Agency (Bulog) Beddu Amang and businessman Ricardo
Gelael, were previously put under city arrest.

Hutomo was officially named a suspect and questioned in
November over the land scam, revolving around a 1996 real estate
swap involving Bulog and private wholesaler Goro.

The deal allowed Goro, 40 percent owned by Hutomo and Ricardo,
to build a wholesale center on a large Bulog tract of land in
Kelapa Gading, North Jakarta.

But Goro failed to meet its obligation to provide 63 hectares
to the logistics agency, resulting in an estimated Rp 96 billion
loss to the state.

An overseas travel ban has also been imposed on Hutomo, Beddu
and Gelael. (byg)