Jakarta – Prosecutors have rejected a defense statement provided by lawyers representing former president Soeharto in relation to the Supersemar Foundation, saying the foundation channeled more funds into the business sector than the education sector.
"The foundation channeled about Rp 500 billion (US$55 million) into the education sector between 1975 and 2006, but this is nothing compared to the US$419 million the foundation handed over to PT Bank Duta in capital investments," Prosecutor Dachamer Munthe told a civil court hearing at the South Jakarta District Court on Monday.
"Therefore, we conclude that the foundation has violated the rule of fairness, which also means the foundation has violated the law," he said.
The foundation gained no profit from lending agreements made with several companies, Dachamer said, adding that most of these borrowed funds were yet to be returned. "The foundation could have distributed funds to a larger number of needy students if all of the funds were distributed correctly," he said.
The prosecutors said in their lawsuit the foundation transferred funds totaling US$420 million and Rp 185.91 billion (US$20.31 million) to PT Bank Duta, Sempati Air, PT Kiani Lestari, PT Kiani Sakti, PT Kalhold Utama, PT Tanjung Redep Hutan Tanaman Industri, PT Wisma Kosgoro and Essam Timber.
Of these companies, only PT Wisma Kosgoro had returned Rp 212 million from the Rp 10 billion handed over by the foundation in 1993.
Dachamer said the foundation had caused state losses and therefore prosecutors insisted Soeharto and the foundation's board members reimburse US$420 million and Rp 10 trillion to the state.
However, Soeharto's lawyers said the lending agreements had not violated any regulations and they had been approved by both Soeharto and the foundation's board as an effort to improve the foundation's funds.
"The foundation's internal ruling enabled its members to manage funds in order to gain profits that could be used to help needy students. If it turned out investments were not profitable, the foundation lost money, not the state.
"Therefore, prosecutors cannot claim to be representing the people and the government in this case because no state losses were inflicted," lawyer Muhammad Assegaf told reporters.
Assegaf said accountability reports submitted by the foundation's board had been endorsed without complaints at the foundation's annual meeting. Presiding judge Wahyono adjourned the hearing until Nov. 6.