22.1.07

Indonesia closer to Suharto millions

By John Aglionby in Jakarta, Monday Jan 22 2007 18:45

A Guernsey court on Monday approved an application by the Indonesian government to freeze tens of millions of dollars allegedly hidden illegally on the island by Hutomo Mandala Putra, the youngest son of the country's former dictator, Suharto.

Jakarta's action is an intervention granted by the Channel Island royal court in a case where Garnet Investment, incorporated in the British Virgin islands and owned by Mr Hutomo – known as Tommy Suharto – is suing a branch of BNP Paribas for refusing to release at least €36m ($45.6m, £23.5m) and perhaps as much as €75m from its account. The court also approved Jakarta's bid to become a third party in the case, according to Marty Natalegawa, Indonesia's ambassador to Britain.

The action by the bank and the Indonesian government is based on concerns that the money was obtained corruptly, Mr Natalegawa said. Transparency International in 2004 put the former Indonesian dictator at the top of its list of 20th-century kleptocrats, estimating that he and his family amassed up to $35bn during his 32-year rule.

Tommy, 44, was released from prison last October after serving five years of a 15-year sentence for ordering the murder of an Indonesian judge who had convicted him of corruption in connection with a land-scam case. During his father's rule, Tommy became one of the most powerful businessmen in the country amid constant whispers over how he – and his siblings – were handed many lucrative contracts and businesses to run. In Tommy's case those included a now defunct clove monopoly and the company developing a national car.

Mr Natalegawa told the Financial Times the government believed the money in the account "is beneficially owned by the republic of Indonesia" because "it was obtained by corrupt use of power" during the Suharto era. Jakarta's lawyers presented some evidence to support their government's affidavit. "We're still building our case, however," the ambassador said. "We will present more evidence when the full trial starts on March 8."

Salman Maryadi, a spokesman for Indonesia's attorney-general, said on Monday the corruption issue was secondary. "The best result would be that the court recognises Tommy's outstanding obligations and orders the money there be used to pay them," he said. "Whether the money was obtained corruptly can be dealt with later."

Mr Natalegawa said that while €36m was the most commonly quoted figure for the sum in the account, initial data put the balance at €75m. "We still looking at this discrepancy, " he said. Mr Salman said Indonesia was keen to seize the €36m in the Guernsey account opened in the name of Garnet Investment because the authorities were not aware of any other assets.

"He is reportedly doing business here but we cannot prove that it is his money," he said. "And we did not go after the money in Guernsey until now because we did not know it was there until this case emerged." According to Transparency International' s Indonesia branch, Garnet deposited money with BNP Paribas in Guernsey on 22 July 1998, weeks after the fall of President Suharto in May.

Four years later, in October 2002, Garnet asked to transfer €36m, a request the bank refused. Three weeks after that Garnet tried to transfer £47,500 and €7,960 to Peter Amy, a Garnet employee, according to Transparency International. The bank also rejected the request.

Todung Mulya Lubis, the head of Transparency International Indonesia, said BNP Paribas must have had good grounds to refuse the transfer requests. BNP Paribas in Jakarta on Monday denied any knowledge of the case while requests for comment from Tommy's assistants went unanswered.

http://us.ft.com/ftgateway/superpage. ft?news_id= fto012220071858561701

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