Jakarta, Indonesia Sentinel — Indonesia’s Attorney General’s Office has named two former bank executives as suspects in a corruption case involving the illegal disbursement of loans to textile giant PT Sri Rejeki Isman Tbk (Sritex), causing hundreds of billions of rupiah in state losses.
The suspects include ZM, former President Director of Bank DKI Jakarta in 2020 and DS, former Head of Corporate and Commercial Division at West Java and Banten Bank (Bank BJB) in 2020.
The Attorney General’s Office also designated suspect to ISL, former President Director of Sritex who served from 2005 to 2022.
The announcement was made on Wednesday (May 21, 2025) by Abdul Qohar, Director of Investigations at the Deputy Attorney General for Special Crimes, following an extensive probe involving 46 witnesses, 9 additional witnesses, and expert testimony.
“Following questioning, the Attorney General’s Office concluded that there is sufficient evidence to charge the three of them with corruption,” said Qohar at a press conference in Jakarta, as reported by CNBC Indonesia.
Investigators allege the three were involved in the unlawful issuance of loans from Bank DKI and Bank BJB to Sritex, bypassing standard risk assessments and internal procedures.
According to Qohar, ZM and DS granted working capital loans to Sritex despite the company being rated BB–, a classification indicating high risk of default. Under Indonesian banking regulations, unsecured loans should only be extended to borrowers with an A rating.
Therefore, the loans were issued without adequate analysis and in violation of banking procedures and prudential principles.
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Meanwhile, ISL is accused of misusing the funds, which were intended as working capital. ISL uses the funds to repay company debt and purchase non-productive assets. The use of the funds reportedly deviated significantly from the loan’s approved purpose.
The loans eventually defaulted, and Sritex’s assets with many of which were not pledged as collateral were insufficient to cover the outstanding debt. As of October 2024, the unpaid balance stood at approximately Rp3.58 trillion (around USD 228 million).
The default led to Sritex being declared bankrupt by the Commercial Court in Semarang. The government estimates total losses from the unlawful lending at over Rp692 billion (approximately USD 45 million).
All three suspects were taken into custody immediately following their indictment and will be held for 20 days during the initial phase of legal proceedings over the Sritex corruption case. They are being charged under Articles 2(1) and 3 in conjunction with Article 18 of Indonesia’s Anti-Corruption Law.
(Raidi/Agung)
