Jakarta – A defendant in a court trying a 2.1 million-dollar counterfeit money case has testified that Indonesia's army chief had full knowledge of the production of fake bills, a report said Wednesday.

"Mr. Darto knew very well that this fake money production was for the interest of the Indonesian military and ... East Timor, " defendant Ismail Putra, a retired army major, was quoted as saying by the Jakarta Post.

Putra was referring to General Tyasno Sudarto, who was the chief of the Indonesian Military Intelligence Agency (BIA) from January 1999 until he was appointed army chief of staff in November last year. "He sanctioned the process. The [former] BIA chief also visited Yustinus Kasminto's house in Palmerah, West Jakarta, where the printing was done," Putra, one of the 10 suspects in the case, told the court.

General Sudarto is considered as one of the country's reformist generals who want to get the military out of its political role and make it more professional. His reform credentials are considered to have won him favour with the government of President Abdurrahman Wahid, the country's first democratically elected president.

The fake money, worth 19.2 billion rupiah (2.1 million dollars) was produced between July last year and February this year. The counterfeit bills are in 50,000 rupiah denominations, which bear the likeness of former president Suharto. Military spokesman Colonel Panggih Sundoro declined to comment on the report.