Jakarta – The director of a politically linked company accused of involvement in Indonesia's multi-million dollar Bank Bali fraud scandal has been acquitted on a technicality, reports said Tuesday.
Djoko Tjandra, executive of PT Era Giat Prima (EGP), had been charged with corruption in "arranging and engaging in illegal transactions," the Jakarta Post daily said.
But he walked free from South Jakarta district court on Monday after judges ruled his case should have been heard in a civil rather than criminal court, reports said.
"It is a civil case, not a criminal one. Therefore, it is the authority of a team of judges in a civil case to rule whether the cessie contract was illegal or not," deputy presiding judge R. Sunarto told the court according to the Jakarta Post daily.
"It was also premature to declare the cessie agreement illegal, as a team of judges in a separate civil case has not yet ruled the cessie illegal and therefore the indictment must be dropped," Sunarto said. Cessie is a term for services provided by a third party in recovering debt by first buying up the debt at a reduced value from the donor.
Bank Bali had 904 billion rupiah in loans to three banks that were later closed down by the government. Under the terms of the closure, the government took over the banks' obligation and therefore owed Bank Bali the 904 billion rupiah.
Following repeated delays in recovering the debt, Bank Bali accepted an offer from EGP – a company linked to a senior executive of the then ruling Golkar party – to pay Bank Bali 358 billion rupiah (48.4 million dollars) for the right to reclaim the 904 billion rupiah from the government.
EGP later claimed the full 904 billion rupiah from the government, in a case that became politically explosive and drew warnings from the International Monetary Fund (IMF) that the matter must be speedily prosecuted.
The spokesman for the Attorney General's Office, Suhandoyo was Tuesday quoted by the Indonesian Observer as lamenting the court decision. "We see too many irregularities during the time the case was handled by the South jakarta state court and it is very unusual that the decision was made by the deputy presiding judge," Suhandoyo said. Suhandoyo also said when Sunarto handed down the verdict, he had not yet received the official written verdict and added that the cession case was only one of the facts included in the charges.
Tjandra is also accused of arranging for a meeting between Bank Bali and EGP executives and officials from the Central Bank and the Indonesian Bank Restructuring Agency (IBRA).
The Bank Bali scandal, came to light in June last year and it has since deeply rocked the country's already ailing banking sector.
A probe conducted by a parliamentary commission on the Bank Bali scandal cited the involvement of several senior government officials and businessmen, including Tjandra and fellow EGP executive, the then Golkar treasurer, Setya Novanto.
The scandal has undermined public confidence on the government's efforts towards a clean government and it has also led to the suspension, for several months, of the flow of promised aid coordinated by the IMF to help the country overcome its dire economic crisis.