Jakarta – North Sumatra’s Prosecutor’s Office has detained two PT Indonesia Aluminium (Inalum) executives in connection with alleged corruption in a 2019 aluminum alloy sale to PT Prima Alloy Steel Universal (PASU), a deal that reportedly caused an estimated US$8 million in state losses.
Inalum Executives Detained
The detained executives have been identified as DS, senior executive vice president of business development, and JS, head of sales and marketing. Both have been held at the Tanjung Gusta Penitentiary since Wednesday and will be detained for 20 days, according to officials.
Indra Hasibuan, head of legal information at the prosecutor’s office, stated the detentions were ordered due to potential risks of flight, evidence destruction, and repeat offenses. Investigators declared the pair suspects based on evidence indicating a change in the payment scheme for the 2019 alloy sales.
The original agreement involved a cash payment with a domestic letter of credit (SKBDN). This was altered to a document against acceptance (D/A) with a 180-day time limit, resulting in PASU not paying for the aluminum alloy shipped by Inalum.
“The action caused state losses of an estimated US$8 million. The actual value is still being calculated,” Indra said. The suspects face charges under Law No. 31/1999 on corruption eradication and could potentially receive a maximum sentence of 20 years in prison.
Investigation and Evidence
Investigators raided Inalum’s offices in Kuala Tanjung on Nov. 13, seeking documents related to the 2019 sales deal. The offices of managing directors, finance directors, strategic services directors, production directors, business development directors, human capital directors, and the logistics head were specifically targeted.
Confiscated documents included Inalum’s financial reports, shipping documents, sales records, and related materials covering the entire sales process from planning to payment. Mochamad Jeffry, special crimes assistant at the North Sumatra Prosecutor’s Office, indicated the case will be further developed to identify all parties involved.
To date, investigators have questioned 10 witnesses. Jeffry added that prosecutors will take action against any other involved parties, in accordance with existing laws.
Inalum is a wholly owned subsidiary of state-owned holding company Mining Industry Indonesia (MIND ID), which is owned by state asset fund Danantara. Other MIND ID subsidiaries include PT Aneka Tambang (Antam), PT Bukit Asam (PTBA), PT Timah, PT Vale Indonesia, and PT Freeport Indonesia.
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