Two on trial for US$9.3m graft in building project

Two on trial for US$9.3m graft in building project

JAKARTA (JP): A company president and an executive of the
Kemayoran Area Development Board were indicted at the Central
Jakarta District Court yesterday for alleged corruption totaling
US$9.37 million in the construction of a condominium project.

Prosecutor Hamid Thahir said Seno Margono alias Tjiong Tjek
Seng, president of private developer PT Duta Adhiputra, and
Hindro Tjahjono Soemardjan, director of the development board,
had used a 25,000-square-meter plot of state land in Kemayoran,
Central Jakarta, as collateral for bank loan.

"The use of the land as collateral was illegal since it was
not yet approved by the then minister/state secretary
(Moerdiono)," Hamid said.

He said Seno and Hindro signed a cooperation agreement on
March 17, 1993, to construct the condominium project with a
capital commitment of US$61.87 million.

The prosecutor said that under the agreement, the board would
provide the Kemayoran plot of land worth US$9.37 million as part
of the capital, while Seno would provide the remaining capital
commitment of US$52.5 million.

In reality, however, Seno never provided the capital and even,
allegedly with Hindro's approval, converted the status of the
land from state assets into company's assets to acquire the loan,
he said.

Hamid said Seno then used the land certificates to acquire the
loan amounting to Rp 65 billion (then US$27 million) from a bank
syndication led by Bank PDFCI.

He said Seno, who is also the son-in-law of businessman Hendra
Rahardja, the owner of the BHS Group, had used Rp 48 billion of
the loan to further his company's interests.

Hamid charged the defendants under Article 1 (a) of Corruption
Law No. 3/1971, which carries a maximum penalty of a life
sentence and or a fine of Rp 30 million.

Seno has been detained since April, while Hindro was detained
on June 12 but was released temporarily on June 24, he said.

Seno's lawyer Alamsyah Hanafiah said outside the court
yesterday that the case constituted a business dispute and not a
crime or corruption case.

"It was pure business," Alamsyah said.

Hindro's lawyer Amir Syamsuddin supported Alamsyah's argument,
saying that his client had yet to commit any violations in his
capacity as director of the board.

"There have been no state losses. We will prove it," Amir
said.

He admitted that the construction and marketing of the
condominiums had not run as well expected due to the economic
crisis. "So, it's a business matter."

Alamsyah said Seno was charged earlier with illegally
possessing property owned by Hendra's brother, Eddy Tansil, who
escaped from jail two years ago.

"But the charge was then dropped. My client was then charged
with this case," he said.

Tansil was sentenced to 20 years in jail for defrauding
Bapindo Bank of US$620 million. He is still at large.

Presiding judge Purwanto adjourned the trial until Monday to
hear the lawyers' statements.

Yesterday's trial was attended by relatives and friends of the
defendants. Noted sociologist from the University of Indonesia
Selo Soemardjan and businessman Arifin Panigoro were among the
visitors. (jun)