Indonesia names former boss of textile giant Sritex suspect in loan fraud
JAKARTA, May 22 (Reuters) - The Indonesian Attorney General's Office has named three people, including the former president director of Sritex (SRIL.JK), opens new tab, as suspects in alleged corruption linked to bank loans to the now-bankrupt textile giant, officials said.
Prosecutors detained the three men as suspects late on Wednesday, said AGO spokesperson Harli Siregar.
The AGO named them as Sritex former president director Iwan Setiawan Lukminto, Zainuddin Mappa, former CEO of Bank DKI , a regional bank owned by the Jakarta provincial government, and Dicky Syahbandinata, a former executive at Bank Pembangunan Daerah Jawa Barat dan Banten (BJBR.JK), opens new tab which is owned by two other provincial governments.
It said that Lukminto was not Sritex's CEO at the time of his arrest, clarifying earlier reports.
Sritex was declared bankrupt at the end of last year as it struggled to service its debts, which reached $1.6 billion in June. It stopped operations on March 1 after failing in its appeal against the bankruptcy ruling.
The corruption investigation is linked to unsecured loans to Sritex totalling about 693 billion rupiah ($42.54 million).
Lukminto was not available for comment and his lawyer is not yet known. His brother, who is also a former Sritex executive, did not immediately respond to a request for comment.
The executives at the regional banks "did not conduct sufficient analysis and comply with procedures and requirements," Abdul Qohar director of investigations at the AGO told reporters on Wednesday. "Granting loans without collateral can only be given to companies or debtors with A rating."
The office did not provide details on when the loans were made.
Sritex's government-appointed curator, Bank DKI and Bank Pembangunan Daerah Jawa Barat dan Banten did not immediately respond to requests for comment. The lawyers for the other two suspects were not immediately clear.
Prosecutors also found that Sritex had outstanding debts to several other banks.
The textile giant made clothes for high street brands including H&M and Rip Curl, but ran into trouble as global demand declined and competition from lower-cost rivals intensified.
Sritex is currently looking for investors to lease its assets.
($1 = 16,290.0000 rupiah)
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