VP family firm to come under spotlight

Rendi A. Witular, The Jakarta Post, Jakarta

With the Supreme Audit Agency (BPK) planning to review past audits on investment irregularities at state social security firm PT Jamsostek, a company owned by the family of Vice President Jusuf Kalla is likely to come under close scrutiny.

BPK chairman Anwar Nasution said on Thursday that the agency would look into past irregularities in Jamsostek, including an investment worth Rp 200 billion (US$21.2 million) in NV Hadji Kalla, a family firm owned by Kalla.

"We are definitely going to review past cases in Jamsostek that may involve corruption, including the investment in NV Hadji Kalla... I am assuredly not afraid to investigate this," said Anwar during a joint press briefing with prosecutors, police and officials from the Corruption Eradication Commission (KPK).

Anwar said if the review led to indications of corruption, the agency would not hesitate to forward the results to either the prosecutors, police or KPK.

In its audit report for the first semester of 2003, the BPK stated that Hadji Kalla offered medium-term notes (MTNs) to Jamsostek, which had a high risk of default due to some irregularities.

Questions about the MTNs apparently began when Hadji Kalla issued a four-year Rp 200 billion note to Jamsostek in April 2002 in a bid to raise cash to help finance the purchase of a firm called PT Bukaka Telekomindo International (BTI) from publicly listed PT Bukaka Teknik Utama (BTU).

The BPK said the collateral for the MTNs, which took the form of land handed over by Hadji Kalla to Jamsostek, turned out to be subject to legal problems, and could not be immediately redeemed by Jamsostek if the firm defaulted on the MTNs.

Another possible irregularity involved the fact that there was actually no evidence that Hadji Kalla had used the proceeds from the MTNs to acquire BTI, as stated in the agreement with Jamsostek that was signed before the issuing of the MTNs.

The Vice President had previously denied the allegations, saying there were no irregularities in the issue and that his company had already redeemed half of the MTNs purchased by Jamsostek.

As requested by President Susilo Bambang Yudhoyono, prosecutors and police are currently focusing on investigating corruption in Jamsostek, which manages workers' funds worth over Rp 32 trillion.

The first case being investigated in Jamsostek is the firm's MTNs investment of Rp 103 billion in the now-defunct Bank Global, which contained sufficient indications of collusion by the Jamsostek directors in making the decision to invest in the instruments.

Jamsostek is among five government institutions at the top of the list for investigation by the newly established government anticorruption team -- consisting of officials from the Attorney General's Office, National Police and the Development Finance Comptroller (BPKP).

The five institutions, which allegedly have misused state funds amounting to some Rp 3 trillion, consist of three state enterprises and two ministries dealing with public welfare.

Deputy Attorney General for Special Crimes Hendarman Supandji said he was not afraid to probe a firm belonging to a senior government official as long as there was sufficient prima facie evidence of graft.

"We have to wait for the BPK to review its audit on the firm (Hadji Kalla) before we investigate the case further," he said.

Aside from Hadji Kalla, the prosecutors are currently looking into alleged irregularities in the extending of loans by troubled Bank Mandiri to cement firm PT Semen Bosowa Maros, which is owned by Kalla's nephew.