Jakarta. The Corruption Eradication Commission, or KPK, announced on Thursday it has dropped the protracted bailout graft case against business tycoon Sjamsul Nursalim and his wife Itjih Nursalim in a landmark decision.
It’s for the first time for the KPK to terminate a corruption case in the commission’s history.
“We would like to announce today the termination of corruption investigation involving SN and ISN as suspects,” KPK Deputy Chairman Alexander Marwata said in a press conference at his office in South Jakarta, identifying the couple by their initials.
The decision was taken to ensure “legal certainty” after years of fruitless attempts to build a strong case, the official said.
The case stemmed from a massive government bailout to ailing banks to prevent the country’s financial system from collapsing in the wake of the 1998 Asian financial crisis, when the value of the rupiah fell sharply against the dollar, severely affecting most lenders' ability to repay their dollar-denominated debt.
Much of the bailout, known as the Bank Indonesia Liquidity Assistance or BLBI, was misused by the bank owners to finance other businesses and they eventually failed to repay the debts.
Sjamsul’s Bank Dagang Negara Indonesia (BDNI) was among the major recipients of the government's Rp 144.5-trillion bailout scheme.
BDNI received a total of Rp 28.8 trillion in bailout fund, though that failed to prevent the bank from having to shut up shop in 1998.
Indonesian authorities suspected a foul play after Sjamsul was exonerated from paying back Rp 3.7 trillion in government bailout by the now-defunct Indonesian Bank Restructuring Agency (IBRA) during Megawati Soekarnoputri presidency in 2002-2004.
According to the KPK, Sjamsul still owed Rp 4.58 trillion in total to the government.
Things became very complicated for the KPK after in July 2019 the Supreme Court acquitted former IBRA chairman Syafruddin Arsyad Temenggung of all charges in a related case.
Syafruddin was in charge of the IBRA when the agency declared that Sjamsul had no debts to repay.
The verdict overturned earlier conviction by lower courts who handed Syafruddin a 15-year jail sentence for graf scandal in connection to BDNI's debts.
While Syafruddin was found guilty as charged, the Supreme Court panel argued that the case was a civil and not a criminal matter, thus ordering his immediate release from a KPK detention facility.
Lack of Determination
Even the previous KPK leadership has admitted that they weren’t so eager to pursue a trial against Sjamsul following Syafruddin’s acquittal.
Then KPK commissioner Laode M. Syarif said imprisoning Sjamsul was not their focus.
"Because he is quite old, he would be more than 80 years old by now," Laode said in an October 2019 interview.
"The main goal is to recover the government's assets, not putting him in jail because he is already very old," he said.
Sjamsul and his wife, who are thought to be living in Singapore, were named graft suspects in June 2019 but they have never been put on trial.
The Supreme Court ruling favoring Syafruddin -- and in turn also Sjamsul because a criminal case was dismissed in his debt scandal -- was marred by another scandal.
It emerged that one of the Supreme Court justices who handled the case had met an attorney of Syafruddin prior to issuing the verdict.
The Supreme Court announced on Sept. 29, 2019 that justice Syamsul Rakan Chaniago had been found guilty of ethical misconduct for secretly meeting Syafruddin's lawyer.
The justice was barred from the court for six months as a sanction, but no criminal charge was put forward.