Jakarta – The Indonesian army has lost 129 billion rupiah (14 million dollars) in an alleged embezzlement scheme involving a colonel and an official from the state bank Mandiri, it has been reported.

The colonel, who was also the director of the army's housing fund Ngadiman, was detained last month along with bank official H.P. Simbolon, on suspicion of conspiring to embezzle some 29 billion rupiah.

But the Koran Tempo quoted Army Chief General Joko Santoso as saying that under the scheme, Ngadiman also stole some 100 billion rupiah that was supposed to be used to set up a foundation, on top of the original amount.

The foundation was to provide free education for children of soldiers, but stipulated that the army must first put up 100 billion rupiah as collateral.

After agreeing to give the foundation the money in July 2004, the army discovered late last year that it was bogus, Santoso said.

"We checked and the money turned out to be missing," Koran Tempo quoted him as telling a parliamentary meeting Monday.

Jakarta police detective chief Syahrul Mamma told AFP in February that Simbolon had already confessed to transferring 29 billion rupiah into the colonel's private account, which was managed by his branch, in 2004.

Simbolon also admitted he had been paid 800 million rupiah (87,000 dollars) by Ngadiman in May 2005 to issue a fictitious cheque, which the colonel later gave to his supervisors during a routine fund inspection. The embezzlement was uncovered when the cheque bounced.

No military spokesman was immediately reachable for comment. Corruption is rife within Indonesia's armed forces, according to anti-graft watchdogs.