The Attorney General’s Office is breaking new ground. Two special teams are being formed to re-investigate the Rp650 trillion BLBI debt settlement by former owners of banks devastated by the economic crisis 10 years ago. One target may be—once again—the boss of Gajah Tunggal, Sjamsul Nursalim. Documents obtained by Tempo point to possible crimes committed by Bank Dagang Nasional Indonesia (BDNI) he owned. The Attorney General at the time even asked the United States to trace BDNI’s assets there.
...one morning in 2002.
KWIK Kian Gie very clearly recalls the moment five years ago. Kwik, who at the time was National Development Planning Minister, rushed to respond to a summons by President Megawati Sukarnoputri to her official residence at Jalan Teuku Umar in Menteng, Central Jakarta.
The clock showed 7am. Upon arriving, Kwik was surprised to see that all the economic ministers under Coordinating Minister for the Economy Dorodjatun Kuntjoro-Jakti had gathered there. “It was just like a cabinet meeting,” Kwik recalled.
An important agenda was about to be discussed. The President, it turned out, was considering the possibility of issuing a decree to release and discharge (R&D) from all legal charges, all the bank tycoons who were considered to have paid their debts in full.
Kwik, who had been criticizing the tycoons since the New Order, immediately disapproved. “It was a Friday,” he recalled. Two days later, he was once again asked to meet with Megawati. But Kwik refused to budge. Mega then asked Kwik to discuss the matter with Dorodjatun.
The R&D was eventually discussed at a limited cabinet meeting. Megawati reiterated her intention to make a decision on the R&D, which she inherited from the previous government. Kwik was powerless. “I could only grumble to myself ‘I’m dead’,” he recounted.
However, he still tried to change her mind. Kwik raised his hand and repeated his disapproval. But Megawati had made up her mind. Presidential Instruction No. 8/2002, a special gift to the tycoons, was signed by Mega on December 30, 2002.
The letter of instruction was addressed to the ministers, the Attorney General, the National Police Chief and the Indonesian Bank Restructuring Agency (IBRA) Chairman. One of the instructions was to issue a release and discharge to the tycoons who had settled their debts to the state.
The top debtors were former bank owners who had enjoyed the government’s Bank Indonesia Liquidity Assistance (BLBI) funds. The program was established to cover the deficits incurred by banks devastated by the 1997-1998 economic crisis.
In an effort to begin recovery, several of the banks became IBRA’s patients. The tycoons were bound by an agreement and were required to surrender some of their assets to IBRA. However, it was later discovered that many of them misappropriated that assistance. Unfortunately, IBRA was only successful in obtaining a recovery level—through asset sales—of around 20 percent of Rp650 trillion.
Armed with the presidential instruction, IBRA’s last chief, Syafruddin Temenggung, practically put the R&D documents up for ‘wholesale’ to the tycoons. When IBRA closed down in February 2004, according to Indonesia Corruption Watch’s records, some 22 debtors had enjoyed this special gift.
Economist Dradjad Wibowo once questioned the transparency of the criteria for issuing the R&D letter. “I’m sure that this issue will continue to haunt some of Megawati’s government officials,” he said.
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June 5, 2007
A mere month after being installed as Attorney General, Hendarman Supandji made a bold move. After meeting with leaders of the Corruption Eradication Commission (KPK), he announced plans to establish a special investigating team on the BLBI case, which had been delayed for three years.
The 35-strong team is divided into two groups: one to investigate, the other to take action. “The plan is to have them formed and operating July 22,” said Secretary to the Deputy Attorney General for Special Crimes, Kemas Yahya Rahman, last Thursday.
What may be worrying the tycoons is that the investigations will extend to reviewing the settlement of obligations signed by debtors who had pocketed the paid-in-full letter. Fugitive debtors will be pursued by the team charged with taking action.
Nevertheless, said Kemas, the policy itself would not be disturbed. To be reviewed will be the motivations behind granting them to the debtors. If the assets ceded to the state turn out to be undervalued or a dud, “then we would be after them,” said Kemas.
Many support the AGO’s objective, because, “Many assets handed over to the government proved to be false,” said ICW Coordinator for Justice Monitoring, Emerson Yuntho.
Kwik also agreed. He even regarded the 1998 agreement between the government and the banking tycoons as legally flawed. The agreement referred to was the Master of Settlement & Acquisition Agreement (MSAA), which regulated the release and discharge clause.
Kwik asked two legal experts, Fred Tumbuan and Kartini Muljadi, to study the agreement. Their conclusion: the MSAA was very much in violation of the Indonesian Banking Law. The law states that misusing bank funds for the bank owners’ interests is considered a crime. “So, it could not be settled with a civil agreement such as the MSAA,” he said.
Marzuki Darusman, Attorney General under President Abdurrahman Wahid, agreed. He said the AGO never recognized the criminal clemency clause. Such policy could only be implemented if there was an umbrella law, not merely based on a presidential instruction. Furthermore, said the Golkar Party politician, the AGO had never abolished the debtors’ criminal cases. Therefore, the AGO should file a lawsuit against the clemency policy issued during Megawati’s term. “On what basis were they issued?” he asked.
Citing the same reason, former member of IBRA’s legal assistance team, Luhut Pangaribuan, is also of the opinion that the decision by the Attorney General, who issued letters terminating investigations (SP3), could be revisited, because there was no closure on the cases. “So, it can be revisited at any time,” he said.
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Of the dozens of tycoons who received the paid-in-full letters, Sjamsul Nursalim, who owed the state Rp28.4 trillion, could be said to be one with the most serious case. A pile of evidence reveals various possible cases of misrepresentation executed by the boss of the Gajah Tunggal Group. The evidence could have been at the AGO for some time.
One can be found in a document entitled Letter of Request of Assistance in the Criminal Matter, dated September 14, 2000, prepared by Attorney General Marzuki Darusman. The letter was addressed to the International Affairs Office of the Criminal Division in the US Department of Justice. It requested assistance in tracking and freezing Nursalim’s assets in the superpower nation.
The reason for the letter, based on the AGO’s investigations, were indications of violations of a credit transaction in the amount of US$386.5 million by the owner of the former Bank Dagang Nasional Indonesia (BDNI) belonging to Sjamsul, from mid-June 1995 to end of October 1997. The funds were encashed through 21 transfers to the East Asia America Capital’s account in Chase Manhattan Bank in New York. The AGO saw indications of criminal action in the transactions because East Asia turned out to belong to the family of Nursalim.
The loan agreements of 12 transactions were made just months after the funds were disbursed. What concerned the AGO was that some of the funds had reportedly “disappeared.” At that time, only an estimated US$150,000 remained. Hence the cry for help to the US government was to immediately trace and freeze the assets purchased using the said funds.
Marzuki confirmed that his office had indeed requested Washington’s assistance and handed over the document when he met with US Attorney General Janet Reno. “However, it wasn’t yet an official letter,” he said. True Rowan, an official at the Criminal Division of the US Department of Justice, could not confirm this matter. “You’re welcome to contact the Indonesian AGO,” she said.
In the document, the AGO also proffered several findings by Business Fraud Solutions (BFS), an international investigation agency hired to work together with IBRA’s audit forensic team—established during Cacuk Sudarijanto’s tenure and dismissed by his replacement, Putu Ary Suta.
From BFS’s investigations, it was discovered that the affiliation credit transactions reached as much as US$607 million, transferred through BDNI Cook and Cayman Islands branch to 10 of Nursalim’s companies in Singapore, Hong Kong, and Taiwan.
The credit proposal was prepared by Laurensia Sally Lawu as the second head of the BDNI branch. The credit approval was issued by Sjamsul Nursalim and Husni Ali, a nephew of Sjamsul Nursalim’s wife.
Since some of the credit transactions were done before the BLBI funds were disbursed, several people charged that there was intention on the part of the BDNI management to obtain funds from the government by emptying their own coffers. As we know, Nursalim enjoyed Rp28.4 trillion of BLBI.
Another charge, as mentioned by a foreign investment banker, were the dollar transfers, which were highly likely to be Nursalim’s trick for BDNI to find a way around the maximum lending limit to its own group, before Bank Indonesia conducted its annual audit.
How was this done? By making it look as though BDNI had given dollar loans to a third party in the amount of US$607 million. Next the funds were exchanged with rupiah to pay for his companies’ debts to BDNI, to avoid violating local banking regulations. “BDNI Cook Islands was only a front,” he said, “In practice, it was operated from the eighth floor of BDNI Building at Hayam Wuruk, Jakarta.”
To this magazine (Tempo, May 26, 2002), Nursalim’s wife Itjih denied such tricks were behind the transactions. “We never transferred a single cent of the BLBI funds abroad,” she said. “It was merely a credit portfolio restructuring.” Some of the credits that were earlier in rupiah were converted to dollars. “We were just protecting BDNI so that it wouldn’t suffer too many losses due to the differences in the exchange rate.”
Unfortunately, Sally Lawu refused to comment on the matter. “I no longer work for Gajah Tunggal,” she said briefly, last Thursday. Tempo’s efforts to seek information from two Gajah Tunggal senior officials: Mulyati Gozali (deputy president commissioner) and Catharina Wijaya (director) ended in failure.
Tempo, on its visit to Gajah Tunggal’s offices in Wisma Hayam Wuruk, Jakarta, only received a response from Mulyati’s and Catharina’s secretary that both refused to comment, although they had received a request for an interview. Emails to two of Nursalim’s children, who were directors of Tuan Sing Holdings in Singapore—Susanto Nursalim and Michelle Nursalim—also went unanswered. Nursalim’s house in the Simprug area in South Jakarta, according to an employee there, has not been visited by his boss for a long time.
Maqdir Ismail, Nursalim’s lawyer, claimed that he was not aware of the details of the transfer of funds overseas. However, what is certain, he said, is that Nursalim had settled his BLBI debts with the assets that he handed over. “He already received the statement that he had paid in full,” he said. “If the matter is to be raised again, that means the government does not respect the agreement.”
Former Coordinating Minister for the Economy Dorodjatun Kuntjoro-Jakti, who at the time was head of the Committee on Financial Sector Policies, confirmed that giving a statement of paid-in-full to Nursalim was indeed a government official decision, which had also been coordinated with the legislative and judiciary bodies.
Nevertheless, he did not deny that if there had been any wrongdoing the case could be re-investigated. “Remember that at the time the Anticorruption Law did not yet exist,” he said. “Also, the KPK was only established towards the end of Megawati’s tenure.”
That being the case, the AGO could start by checking again BFS’s findings, especially since it is suspected that the companies handed over by Nursalim (GT Petrochem, GT Tire and Dipasena) were far from adequate. A letter from PT Tunas Sepadan Investama (the holding company managing Nursalim’s assets) dated October 13, 1999, stated that the assets which originally were estimated at Rp27.4 trillion had plummeted to a mere Rp6.3 trillion.
According to a study by IBRA’s Legal Assistance Team (TBH), the biggest plunge was suffered by the Dipasena shrimp pond, from an original estimate of Rp20 trillion to a mere Rp5.2 trillion. One of the reasons cited was the shrimp farmers’ loans handed over to IBRA were non-performing, and this had never been reported. That is why TBH and IBRA’s supervisory committee headed by Mar’ie Muhammad at one point requested that Nursalim’s assets be recalculated. The committee also requested that BFS’s findings be followed up.
Unfortunately, all the suggestions and recommendations were never met with a response. Instead, Nursalim was granted a paid-in-full document during the final period of IBRA’s ‘service.’
Metta Dharmasaputra, Heri Susanto, Muchamad Nafi, DA Candraningrum, Abdul Manan
The Ebb and Flow of Nursalim’s Case
Bank Dagang Nasional Indonesia becomes a patient of the Indonesian Bank Restructuring Agency (IBRA).
BDNI assets are frozen.
Sjamsul Nursalim signs a debt settlement agreement (MSAA).
Nursalim hands over assets worth Rp27.4 trillion and Rp1 trillion in cash to IBRA.
The Supreme Audit Agency (BPK) announces its audit on Bank Indonesia Liquidity Assistance (BLBI) funds. BDNI is one of the banks found to have misappropriated BLBI funds.
BPK chief, S.B. Joedono, reports to the Attorney General’s Office (AGO) 10 banks suspected of having misappropriated BLBI funds, including BDNI.
The AGO requests the assistance of the US Department of Justice to trace the transfer of BDNI funds (US$386.5 million) to East Asia America Capital’s account at Chase Manhattan Bank in New York. IBRA’s Audit Forensic Team (Forsat) had earlier discovered a possible crime may have been committed in the disbursement of BDNI’s loans to an affiliated company overseas in the amount of US$607 million.
Attorney General Marzuki Darusman declares Nursalim a suspect.
Nursalim is detained by the AGO.
Nursalim is allowed to seek medical treatment in Japan. But he doesn’t return and now resides in Singapore.
A report by the Finance Development Controller declares that state losses incurred by BDNI’s misappropriation of BLBI funds reaches Rp7 trillion.
IBRA Supervisory Committee requests that the IBRA Chairman follow up the findings of the Forsat team.
Megawati issues a presidential decree releasing BLBI debtors from their debt liabilities.
IBRA is dissolved, continued by an IBRA Settlement Team.
Nursalim receives a letter from IBRA stating he has paid his debts.
Attorney General M.A. Rachman orders the termination of investigation (SP3) on Sjamsul Nursalim’s case.
Attorney General Abdul Rahman Saleh declares he will review the five SP3 cases, including Nursalim’s.
Tempo Magazine, No. 43/VII/June 26 - July 02, 2007