Indonesian court resumes Suharto graft case

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JAKARTA, Sep 24 (Reuters) An Indonesian court resumed hearings in a 1.5 billion dollars lawsuit against former president Suharto on Monday after lawyers for both sides failed to reach an out-of-court settlement earlier this month.

State prosecutor Dachmer Munthe told the court that he was seeking a total of 440 million of state funds and a further 1.09 billion dollars in damages for alleged misuse of funds held by one of Suharto's charitable foundations.

''As a result of the misuse, many schoolchildren and college students in Indonesia dropped out of their education because they have been deprived of the financial help they needed,'' Munthe told judges at the South Jakarta district court.

The civil suit filed by the attorney-general's office is part of efforts to recover state funds allegedly misused by Suharto's charitable foundations. It is seen as an important test of the government's pledge to clamp down on corruption.

Munthe told the court that during the 1980s and 1990s, the foundation had paid money to a privately owned bank, an airline controlled by one of Suharto's sons, a pulp and paper company, a logging firm, and a cooperative linked to Golkar, the political party which was run by Suharto and is now a member of the ruling coalition.

According to documents submitted to the court, the attorney-general's office also plans to seize a high-rise building in Jakarta owned by the foundation, which it would hold as security during the court hearings.

Juan Felix Tampubolon, one of Suharto's lawyers, dismissed the charges as a political stunt.

''All the decisions were based on the foundation's articles of association and no law was broken,'' he told reporters after the hearing.

Suharto, who ruled Indonesia for 32 years until he was forced to resign in 1998, did not appear in court. The former president and members of his family have denied any wrongdoing.

In May, President Susilo Bambang Yudhoyono appointed a new attorney-general and justice minister in an attempt to revive his anti-corruption campaign. Some critics say the anti-graft drive has failed to take on the country's most powerful figures.

Suharto, 86, was previously charged with graft but escaped prosecution in 2001 because the supreme court chief justice at the time ruled that he was too ill to stand trial.

The foundation that Suharto headed collected donations from businessmen and other sources to provide scholarships. Many organisations regarded such donations as more or less compulsory during Suharto's rule.

Defence lawyers are submit their response to the charges in court next week.

REUTERS SZ AS1204

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