Sugar Import Case Timeline: How Thomas Lembong Became a Suspect

Ilham Oktafian
October 30, 2024 | 11:24 am
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Former Trade Minister Thomas Lembong, center, is escorted by prosecutors at the Attorney General s Office in Jakarta after he was named a corruption suspect, Tuesday, Oct. 29, 2024. (Antara Photo/Rivan Awal Lingga)
Former Trade Minister Thomas Lembong, center, is escorted by prosecutors at the Attorney General s Office in Jakarta after he was named a corruption suspect, Tuesday, Oct. 29, 2024. (Antara Photo/Rivan Awal Lingga)

Jakarta. The Indonesian Attorney General's Office (AGO) has detailed the timeline of a sugar import case from 2015 to 2023 involving former Trade Minister Thomas Trikasih Lembong, also known as Tom Lembong. The Harvard graduate has been named a suspect, accused of causing state losses of approximately Rp 400 billion ($25.41 million).

AGO’s Director of Criminal Investigation, Abdul Qohar, explained that the case began on May 12, 2015. During a coordination meeting between ministries, officials concluded that Indonesia had a sugar surplus and would not need to import more. However, despite this decision, Lembong granted import approval to a private company, PT AP, in 2015, allowing the import of 105,000 tons of raw crystal sugar, which was later refined into white crystal sugar.

Qohar said that Lembong’s import approval was issued without consulting relevant ministries or conducting a coordination meeting to assess domestic sugar needs. Under Trade and Industry Minister Regulation No. 57/2004, only state-owned enterprises (SOEs) are authorized to import white crystal sugar.

Further developments in December 2015 indicated that Indonesia might face a shortage of 200,000 tons of white crystal sugar by 2016. To address this, CS, the Director of Business Development at the state-owned trading company Perusahaan Perdagangan Indonesia (PPI), initiated meetings with PT AP and other private sugar companies—PT PDSU, PT AF, PT MT, PT BMM, PT SUJ, PT DSI, and PT MSI—tasking them with processing raw sugar into white crystal sugar, despite lacking the necessary licenses for this operation.

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"These meetings were to discuss a cooperation plan for importing raw sugar to be processed into white sugar, with the knowledge of the then-CEO of PPI," Qohar said.

In January 2016, Lembong signed an assignment letter to PT PPI to fulfill national sugar stock and stabilize prices through collaboration with domestic sugar producers, allowing them to import and process 300,000 tons of raw sugar.

According to Qohar, the import approval from the Ministry of Trade was issued without recommendations from the Industry Ministry and without coordination with relevant agencies.

The companies then sold the sugar to the public through affiliated distributors at Rp 16,000 per kilogram, exceeding the highest retail price (HET) of Rp 13,000. They also neglected the required market price stabilization operations.

In exchange for facilitating these transactions, PPI received a fee of Rp 105 per kilogram from the eight companies. These actions led to an estimated state loss of Rp 400 billion.

The AGO revealed that prosecutors have been investigating Lembong over alleged illegal sugar imports since last year, officially identifying him as a corruption suspect on Tuesday, October 29, 2024.

Lembong served as trade minister from 2015 to 2016 and later as head of the Investment Coordinating Board (BKPM) from 2016 to 2019 under President Joko “Jokowi” Widodo. Since leaving the cabinet, he has become an outspoken critic of the government.

However, the senior prosecutor dismissed any claims that the case was politically motivated.
 

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