Former Indonesian minister arrested in sugar corruption probe; the state would have lost more than 25 million dollars

JAKARTA: A minister who served under former President Joko Widodo during the latter's first term was named on Tuesday (October 29) as a suspect in a corruption case involving sugar imports that allegedly caused losses to the state of worth some 400 billion rupees ($25.5 million).

Local media reported that former Commerce Minister Thomas Lembong was arrested by authorities for his alleged involvement in a corruption case involving sugar imports handled by his then ministry between 2015 and 2016.

Mr. Thomas served as Indonesia's Minister of Commerce between August 2015 and July 2016.

He was accused by the Attorney General's Office (AGO) of issuing an import permit for 105,000 tonnes (105 million kilograms) of red sugar crystals in 2015. This, they claim, while he knew that there was a domestic surplus of this product. local media reported.

The move allegedly violated a 2004 trade and industry ministerial regulation that stipulated that only state-owned enterprises (SOEs) were allowed to import raw sugar.

The AGO has since also denied claims that Mr Thomas' arrest was politically motivated.

A Director of Investigations at the AGO, Mr Abdul Qohar, said the process was carried out in accordance with relevant procedures.

“Regardless of the perpetrator, when solid evidence is found, the investigator will designate the individual as a suspect,” he said, quoted by local media Tempo.

Mr Thomas' arrest was made following an investigation opened in October last year, involving 90 witnesses. The former minister was arrested at the Salemba Detention Center in Jakarta on October 29 with another suspect, known to be the business development director of state trading company PPI.

At the time, the suspect, as Minister of Commerce, granted the import license without prior coordination with relevant state agencies, Mr Abdul Qohar was quoted as saying by the Jakarta Globe.

In January 2016, Mr. Thomas reportedly signed a letter ordering PPI to become a state-owned company in order to meet national sugar needs and stabilize commodity prices in the country.

PPI was also tasked with working with domestic sugar producers to produce 300,000 tonnes of white sugar. She worked with at least eight private sugar companies despite the 2004 ministerial regulation.

Mr. Thomas and PPI's business development director are suspected of having knowledge of PPI's cooperation with these private companies.

AGO investigators also claimed that PPI purchased refined sugar from private companies, although these companies sell the product directly to consumers at 16,000 rupees per kilogram, more than the highest retail price of 13,000 rupees per kilogram, which resulted in losses to the state during the sale.

We estimated the loss suffered by the state, this was done by experts, which took a lot of time as it is not a simple and ordinary case, Mr. Abdul Qohar said while addressing a press conference in Jakarta on October 29, also broadcast on the AGO YouTube. channel.

The suspects' alleged corruption amounts to 400 billion rupees ($25.5 million) in losses to the state. Profits obtained by private companies should have been returned to state trading company PPI, the AGO said.

The prosecutor added that the import license was granted to a private company identified as PT AP, although only state-owned companies are allowed to procure the products from foreign sources under the 2004 Ministerial Regulation on Trade and Commerce. the industry. This was also done despite a ministerial coordination meeting concluding that the national stock of this product was already in surplus.

Local media reported that Mr Thomas was a close ally of Mr Widodo and was at one time an economic adviser and speechwriter to the former president.