Tommy still owes government Rp 2.3t, says Finance Ministry

Car company PT Timor Putra Nasional owned by Hutomo "Tommy" Mandala Putra, son of late former president Soeharto, should pay debts up to Rp 2.37 trillion (US$263.07 million) to the state, the Finance Ministry said.

The amount is exclusive of a 10 percent administration fee, meaning Timor should pay Rp 2.61 trillion in total, the ministry said in a statement on Monday.

This is another government's attempt to recover state debts from Timor, established in 1995 and granted "national car producer" status when Soeharto was in power, in a legal case that began more than a decade ago.

According to the ministry, Timor was given a credit facility at Bank Bumi Daya (now merged with Bank Mandiri) using the firm's current account and deposit account as collateral.

On March 31, 1999, the credit was taken over by the now-defunct Indonesian Bank Restructuring Agency (IBRA) after Timor defaulted on its debts.

On April 30, 2003, the IBRA sold Timor's assets to PT Vista Bella Pratama, excluding the current account and deposit account, which were seized by the tax office.

On Aug. 8, 2008, the sale of Timor was cancelled by Finance Minister Sri Mulyani Indrawati, who took over the responsibility of IBRA, after the Corruption Eradication Commission found out that Vista was affiliated with Timor and Tommy and did not represent an independent buyer.

The cancellation of the sale was confirmed by an agreement signed between the Finance Ministry and Vista, and a ruling made by the Central Jakarta District Court on Nov. 27, 2008.

Therefore, all debts belonging to Timor automatically became state debts, including the current account and deposit account that have never been sold to Vista, the ministry said.

On Nov. 26, 2008, Mulyani asked Bank Mandiri to disburse and transfer the funds in the current account and deposit account to the state treasury's account to be set off against existing Timor's debts. This leaves Timor owing a remaining Rp 2.37 trillion in state debts.