Hong Kong billionaire sentenced to five years jail. How about Indonesian Tycoon?

KONFRONTASI-A Hong Kong property tycoon, Thomas Kwok, has been sentenced to five years in jail for corruption.

The former co-chairman of Sun Kung Kai Properties, was fined HK$500,000 ($64,440, £41,327) in a highly publicised graft case.

He was found guilty of one count of conspiracy to commit misconduct in public office, while his younger brother Raymond was cleared of charges.

The firm had said on Friday that Kwok would appeal against the conviction.

Kwok, 63, resigned as chairman and managing director of the city's largest property developer after the verdicts were delivered last week.

Government ties

He was convicted of giving bribes totalling $1.1m to former government official Rafael Hui in exchange for information on land sales between 2005 and 2007.

Hui, 66, is also facing a jail sentence after being found guilty on five of the eight charges against him.

The seven-month trial shocked the city and saw the valuable developer's shares tumble, erasing billions in market value since the brothers were arrested over two years ago.

The Kwok brothers are estimated to be worth more than $14bn, ranking them among Asia's richest people.


The Corruption Eradication Commission (KPK) said on Tuesday that it would expand its probe into other Bank Indonesia liquidity support (BLBI) debtors who were alleged to have colluded with government officials to offer them clearance letters freeing them from their obligation to pay their debt under the presidential administration of Megawati Soekarnoputri in 2002.

KPK deputy chairman Bambang Widojanto said that investigators were now looking into alleged irregularities in the issuance of a clearance letter for tycoon Sjamsul Nursalim, the owner of Bank Dagang Nasional Indonesia, which received financial assistance under the BLBI scheme.

But Bambang also said that investigators launched a probe into 21 other tycoons receiving such a clearance.

“We are not prosecuting the policy, we are investigating how the policy was abused [by state officials] as a means to commit crime. The letters should only be given to those who had paid their debt. But why in some cases did the debtors who had not paid their debt receive such a luxury?,” Bambang said on Tuesday.

Sjamsul, who is also known as the owner of tire maker giant Gajah Tunggal and coal miner Bukit Baiduri Energi, is currently overseas. Bambang said that Sjamsul’s whereabouts would not hamper the ongoing investigation at the KPK.

“Remember graft convict Anggodo Widjojo, who was arrested abroad after 2 years? So, don’t worry we have our own way to conduct the investigation,” Bambang said.

During the 1997-1998 Asian financial crisis, the government, through the central bank, provided liquidity support of Rp 144.5 trillion to assist 48 commercial banks in coping with massive runs during the monetary crisis, but 95 percent of the money was eventually embezzled. Sjamsul received Rp 28 trillion of BLBI funds.

According to data from the Indonesia Corruption Watch (ICW), the 21 debtors include Hendra Liem of Budi International Bank, the Ning King of Dana Hutama Bank, Sudwikatmono of Bank Subentra and Bank Surya, Ibrahim Risjad of the Bank Risjad Salim International, Soedono Salim of Bank Central Asia (BCA), Siti Hardijanti Rukmana of Yakin Makmur Bank and Hashim Djojohadikusumo of Papan Sejahtera bank and Nirwan Bakrie of Nusa
Nasional bank.

KPK Bambang refused to disclose details about the possible investigation on the other tycoons that the antigraft body would launch in the future, adding that giving away too much information could compromise the ongoing investigation.

Earlier on Monday, the KPK grilled former coordinating economic minister Rizal Ramli under the administration of president Abdurrahman “Gus Dur” Wahid in relation to the case. Speaking after the questioning, Rizal blamed Megawati for the massive financial losses from the BLBI scandal.

Rizal said that the debtors lobbied the Soeharto administration, convincing high-ranking officials to allow them to pay back their debts to the state using assets, whose value was constant, rather than cash.

Rizal said Gus Dur, deplored the Soeharto administration’s decision, which he said would cause the state massive financial losses, as the value of the assets would decrease overtime.

“To make sure that the tycoons paid back the same amount as they had borrowed from the state, we issued what we call a personal guarantee notes policy. The policy meant that if the tycoons couldn’t pay their debt, then their families, until the third generation, bore the responsibility to pay,” he said.

Rizal said Megawati reversed the policy.

“The policy gave the government strong bargaining positions in the case, but after our administration was over the policy was withdrawn [under Megawati’s administration],” Rizal explained.

To replace the personal guarantee notes policy, Megawati, after receiving input from her Cabinet ministers, including former finance minister Boediono, coordinating economic minister Dorodjatun Kuntjoro-Jakti and state-owned enterprises (SOE) minister Laksamana Sukardi, issued Presidential Decree No. 8/2002, which regulated these “release and discharge” letters, freeing recipients of the funds from obligation to fully pay the debts.