Business

Tue May 06 02:01:33 PDT 2008

By Telly Nathalia

JAKARTA, May 5 (Reuters) – Indonesian prosecutors said on Monday they had were suing former President Suharto’s youngest son for more than $400 million over a business deal involving his failed national car project.

The attorney general’s office, acting on behalf of the finance ministry, seeks 4 trillion rupiah ($439 million) in damages from Hutomo Mandala Putra Suharto, usually known as Tommy, and his companies, which include PT Humpuss.

PT Timor Putra Nasional, set up by Tommy Suharto to build Indonesia’s national car, defaulted on its loans to Indonesian state banks after the 1997-98 financial crisis.

But in 2003, Timor’s assets were sold to a little-known company called Vista Bella Pratama.

The sale was a breach of Indonesia’s regulations as both the seller and buyer were controlled by the same individual, Tommy Suharto, prosecutor Dachmer Munthe told Reuters.

"Vista Bella was only a vehicle. It was created to pool funds from firms related to Humpuss and Tommy," Munthe told Reuters.

The sale was carried out by the Indonesian Bank Restructuring Agency (IBRA), which managed Timor’s assets after it defaulted on its debts. IBRA also seized the assets of many other Indonesian firms that defaulted.

Tommy Suharto’s lawyers could not be reached for comment.

Timor attracted considerable criticism because it sold a rebadged version of South Korean-made cars.

President Suharto ruled for more than three decades until he was forced to step down in 1998 amid a financial crisis and economic collapse. Many members of his family and circle of friends won attractive contracts and deals during his rule.

Transparency International put Suharto’s assets at $15-$35 billion, but he and his family always denied any wrongdoing. While Suharto, who died earlier this year, was charged with embezzling hundreds of millions of dollars after he quit office, the government later dropped the case because of his poor health.

However Tommy, who owned businesses including an airline, has been involved in several court cases and served time in prison for ordering the murder of a judge.

In August 2007, the national logistics agency, known as Bulog, filed a civil suit against Tommy over a land deal.

The state agency sought 500 billion rupiah from Suharto’s son for losses resulting from what it alleged was a fraudulent transaction, but Bulog lost the suit and was ordered to pay Tommy 5 billion rupiah.

($1=9,221 rupiah)

(Reporting by Telly Nathalia; Writing by Ahmad Pathoni; Editing by Sugita Katyal and Sara Webb)

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