Indonesia is not ashamed to be a corruptted Nation.its a pride and joy its aculture things we do here.
The worst banking scandal in Indonesian history is threatening to expose the corrupt ties among prominent Government officials, bankers and business leaders in Southeast Asia’s most populous nation.
The scandal, involving the loss of $436 million in bad loans, revolves around Eddy Tansil, a well-connected businessman who is now on trial in Jakarta, the Indonesian capital. He is charged with forgery and fraud involving 16 loans from the Government-run development bank, known as Bapindo, that were to be used for construction of petrochemical plants.
The charges against Mr. Tansil are so technical that it took prosecutors two and a half hours simply to read out the indictment at a court hearing last week. The Indonesian public appears riveted by the case, because it involves the loss of hundreds of millions of dollars in public money and also because it threatens to soil the reputations of several Indonesians far more prominent than Mr. Tansil.
Among them are officials with close ties to President Suharto, the nation’s leader since the 1960’s.
When the trial opened on May 10, hundreds of spectators turned out. As Mr. Tansil walked out of the courtroom later in the day, several spectators reportedly tried to punch the 40-year-old businessman, who had to be protected by a phalanx of police carrying rattan canes.
Prosecutors are trying to prove that Mr. Tansil was given hundreds of millions of dollars in loans as a result of pressure on Bapindo from high-ranking Government officials.
News reports in Indonesia have said that Admiral Sudomo, the former chief security minister and a longtime aide to President Suharto, wrote to the bank to vouch for Mr. Tansil, who was little known in financial circles in Jakarta at the time. The former finance minister, J. B. Sumarlin, was a member of the bank board when it issued the credits. Neither man has been charged in the case, although both may be called to testify at Mr. Tansil’s trial.
President Suharto’s youngest son, Hutomo Mandala Putra, has also been linked to the case. Mr. Hutomo, a businessman with hundreds of millions of dollars in holdings in Indonesia, was a partner in Mr. Tansil’s Golden Key Group but sold his stake back to the company last year. Loans Went for Personal Use
Prosecutors have said that some of the money lent to Mr. Tansil was used by his family to buy land, houses and cars for personal use. The chief prosecutor, Luckman Bachmid, said in court last week that these were “losses to the state for self-aggrandizement.” Mr. Tansil, who is facing life imprisonment if convicted, has denied any wrongdoing.
While the case against Mr. Tansil threatens to embarrass current and former Government officials, diplomats say the trial may be a hopeful signal that the Suharto Government is finally beginning to crack down on the notoriously corrupt state banking system, which is plagued by patronage and kickbacks.
“I would really doubt that all of the dirty laundry in this case is going to come out — the Government couldn’t afford that — but some well-known people could find themselves humiliated in the process,” said a Western diplomat in Jakarta. Five Bapindo officials are also facing trial in the case.
Bapindo and six other state-controlled banks handle about half of the banking assets in Indonesia, and it is widely understood in Jakarta that they hand out loans as much on the basis of political connections as on collateral.
In February, the current Finance Minister, Mar’ie Muhammad, acknowledged that more than one-fifth of the total outstanding loans of the state banks were either bad or overdue. Mr. Mar’ie is admired in Southeast Asian financial circles for his efforts to clean up the state banks, although there is skepticism that he can end the worst of the abuses in a system riddled with corruption.