Indonesia court holds hearing on Suharto civil suit

JAKARTA, Aug 9 (Reuters) An Indonesian court held a brief hearing today in a civil suit against former President Suharto seeking about 1.5 billion dollars.

The suit is part of efforts to recover state funds allegedly misused by one of his charitable foundations.

Suharto, 86, who resigned under pressure following civil unrest in 1998 after 32 years in power, was previously charged with graft but escaped prosecution after he was deemed too ill to stand trial.

The hearing at the South Jakarta District Court lasted for 20 minutes and was adjourned after judges gave both sides three weeks to explore an out-of-court settlement as required under Indonesian law.

Prosecutors were seeking a total of 440 million dollars of state funds in the suit, and a further 10 trillion rupiah (1.08 billion dollars) in damages, court documents showed.

The foundation collects donations from businessmen and other sources to provide scholarships. Helping a foundation with links to Suharto during his reign was seen as a civic duty.

Suharto's lawyer Mohammad Assegaf dismissed the civil suit as a political stunt.

''The foundations were not state-owned to begin with, and they are free to invest their funds in any businesses they like,'' he told reporters after the hearing.

High-profile graft cases in Indonesia can drag on for years.

The previous attorney-general announced plans to sue Suharto in February, but the lawsuit stalled because the original documents were not available, according to media reports.

Deputy attorney-general Alex Sato Bya said the government now had the necessary documents.

During Suharto's years in power the former general sharply raised incomes in the world's fourth most populous country, but political freedom was curtailed and graft was endemic.

Critics say he and members of his family corruptly amassed up to 45 billion dollars, accusations they deny.

The former president has denied any wrongdoing.

President Susilo Bambang Yudhoyono picked a new attorney-general and new justice minister in a cabinet reshuffle in May partly aimed at reinvigorating his campaign against corruption.

Some critics say the anti-graft drive has failed to take on certain powerful vested interests.

Reuters CS DB1111