Devi Asmarani, Jakarta – An Indonesian Army auditing team has cleared a general of corruption allegations after it concluded an investigation that sceptics suspect is a mere cover-up.

The Army Inspector-General, Major General Djoko Subroto, said yesterday that Lt-General Djadja Suparman was found free of corruption during his four-month term in the Army Strategic Reserves Command (Kostrad) last year. "Based on our team's findings, we concluded there was no corruption within the Kostrad under Lt-Gen Djadja, only administrative irregularities," Maj-Gen Djoko told a press briefing.

Lt-Gen Djadja was suspected early this year of having unaccountably used almost 200 billion rupiah (S$42 million) of the Kostrad's Dharma Putra foundation. The foundation owns several profit-making companies, including private carrier Mandala Airlines. He has dismissed the allegation.

Maj-Gen Djoko said Lt-Gen Djadja had not done anything wrong. The money was only used to improve troops' welfare and finance purchase of equipment like bullet-proof vests and parachutes for his commands. At the time, it was not illegal or unethical to do this," he said.

His junior officer, Kostrad's treasurer Colonel Fahmi, was instead found guilty of "administrational flaws which had triggered suspicions that there was corruption in the Kostrad", he said. Col Fahmi will face disciplinary sanction that will be determined by his current commander Maj-Gen Ryamizard Ryacudu.

Yesterday's announcement raised concerns that nothing had changed in the country's most cosseted institution, despite talks that reforms were under way. "I doubt that there was ever a serious intention to investigate the case," military analyst Indria Samego said. "Democracy does not exist in the military – how can we expect the audit team to probe their three-star generals?" he added.

Mr Indria, who has written a book on the businesses of the military in the country, said top military officers might have intervened in the investigation process for fear that its result would affect other military units where corruption is also rampant.

The team said yesterday that the State Supreme Auditing Body had also not found indications of corruption in the Kostrad, and that the public accountant, appointed by Lt-General Agus Wirahadikusumah, had refused to give an opinion on the matter. But some officials had earlier said the public accountant was not given access to audit Kostrad.

Last July, the then Kostrad chief, Lt-Gen Agus, had ordered an audit into financial irregularities in the Dharma Putra foundation under Lt-Gen Djadja's leadership. Many people linked Lt-Gen Agus' removal from his post a month later to his campaign to uncover the missing money.

Tempo newsmagazine reported in July that aside from withdrawing money from Mandala and the Dharma Putra foundation, there were some indications of mark-ups in the supply and purchase of land and equipment, and the financing of project developments under Lt-Gen Djadja.

Yesterday, the Army's audit team said the only thing it found was that "poor communication" between the Kostrad, the foundation and its companies had led to undisciplined financial administration. The foundation had never been audited since its establishment in 1964, the team said.

Aside from Mandala, the Dharma Putra foundation owns partial shares in various companies. These include a toll road operator and an importer of luxury cars.