Jakarta – Indonesian police questioned the local franchise holder of fast-food chain McDonald's for seven hours on Monday over a suspected graft scandal involving millions of dollars.

Police say Bambang Rachmadi, the son-in-law of a former Indonesian vice-president, is suspected of obtaining a 40 billion rupiah loan unlawfully from state pension fund Jamsostek and failing to pay it back.

"We asked him 29 questions and we will question him again soon. But we won't detain him now," Anton Wahono, head of the corruption division for the Jakarta police, told reporters. "We can't detain people without careful consideration." Rachmadi failed to answer a summons to appear for questioning in early April after being questioned a month before and police said then they would definitely arrest him.

Rachmadi denied that he had tried to evade the police summons and said he was not guilty of anything.

"I told the police before I left that I planned to go to Australia and the United States for two months. And I've told them I want to go to Kuala Lumpur soon," he told reporters.

"Who said I'm a fugitive? I have paid back all of the debts. I have nothing to lose and nothing to hide," he added.

The loan was made to the Rachmadi-controlled holding company for McDonald's Indonesia – the country's largest fast-food chain with 76 outlets in 17 cities.

Jamsostek is the country's largest pension fund. Police have named two former officials suspected of giving Rachmadi's company the loan in 1999 without approval from the Jamsostek board of commissioners.

There have been a spate of high profile corruption cases in Indonesia, that some political analysts say shows President Megawati Sukarnoputri is serious about cracking down on graft, which has made the country a byword for corruption. Verdicts in most of the cases have yet to be delivered.

When Megawati took power last July she promised to clamp down on graft, much to the scepticism of many Indonesians and foreign investors.

Rachmadi is a son-in-law of former Indonesian vice-president Sudharmono, who also once headed the former ruling Golkar party.