By Khairie Hisyam
Exclusive: Controversial 1Malaysia Development Bhd’s (1MDB) latest partner, Indonesian property developer Mulia Group, has ties to a convicted fraudster who has been on the run from Indonesian authorities for years.
Djoko Tjandra
According to a 2002 report by The Jakarta Post, Mulia Group is owned by Djoko Tjandra, a fugitive wanted by Indonesian authorities for a 2009 conviction of embezzling some RM149 million in state funds. Djoko reportedly had been staying in Papua New Guinea in recent years, where he was granted citizenship status which complicated extradition efforts by his home country.
Djoko is listed on the International Police (Interpol) website as a wanted man by the judicial authorities of Indonesia for corruption offences. He holds both Indonesian and Papua New Guinea citizenship.
According to Forbes, Djoko is also brother to Eka Tjandranegara, who was named as president-director and owner of Mulia Group in 1MDB’s press statement on May 13, 2015. It is unclear whether Djoko retains any ownership in Mulia Group following his conviction in 2009.
Eka Tjandranegara
Forbes ranks Eka Tjandranegara as Indonesia’s 17th richest man in 2014 with a net worth of US$1.7 billion (RM6.07 billion). He reportedly started his business journey with his father and two brothers, one of which was Djoko.
At publishing time KINIBIZ is awaiting response to queries sent to 1MDB representatives. KINIBIZ also emailed Mulia Group but has yet to hear back.
On May 13, 1MDB announced it is bringing in Mulia Group to develop the Signature Tower in its Tun Razak Exchange (TRX), having signed a sale and purchase agreement (SPA) with the group worth RM665 million.
The land parcel in question was previously linked to pilgrimage fund Tabung Haji as a potential buyer. This followed documents leaked in early May, detailing Tabung Haji’s proposed purchase of two land parcels with a combined price of RM772 million.
Despite initial denials, Tabung Haji later confirmed the purchase of one land parcel for RM188 million but did not proceed with the second land parcel, which would house the Signature Tower. The proposed purchase price was RM578 million or RM3,900 per square foot (psf), slightly lower than the Mulia Group deal.
“We are pleased to have the Mulia Group on board towards realising the potential of TRX. This significant investment underscores foreign investor confidence in Malaysia,” said Azmar Talib, chief executive officer of TRX master developer, 1MDB Real Estate Sdn Bhd, in a statement last week.
KINIBIZ examined the controversy over 1MDB’s rushed land sale to Tabung Haji in a two-part series here.
Embezzlement scandal
Notably, Djoko was among the names involved in Indonesia’s 904-billion-rupiah (RM246 million) Bank of Bali scandal, which saw millions embezzled from state bailout funds amid the Asian Financial Crisis (AFC). He was acquitted in 2000 but later convicted in 2009.
The scandal centred on some 546 billion rupiah in commissions paid to a company called PT Era Giat Prima for its services in helping the Bank of Bali recover 904 billion rupiah in interbank claims from defunct banks.
However, the Indonesian Bank Restructuring Agency (Ibra), which controlled the now-defunct Bank of Bali, admitted that no third-party services were required in recovering those claims since they were insured by a government blanket guarantee programme, according to reports.
Djoko was a director of that company at the time. The company itself was reportedly controlled by the then-deputy treasurer of Indonesia’s Party of the Functional Groups, more commonly known as the Golkar party, raising questions of whether the funds were used to finance political activities.
In 2000, the South Jakarta District Court reportedly dropped Djoko’s indictment on a legal technicality. The decision was later upheld by the Indonesian Supreme Court, which reportedly declared that Djoko could not be tried for the case amid public controversy.
Djoko was later tried and convicted in 2009 for misusing the funds. The Indonesian Supreme Court found him guilty and announced a 15-million-rupiah fine on top of a two-year prison sentence.
However, he reportedly fled to Papua New Guinea on June 10, 2009, one day before the Supreme Court issued the verdict on his case.
Extradition hurdle
While the Indonesian authorities have pursued Djoko’s extradition for years, the major hurdles were that Djoko is now a Papua New Guinea citizen and there is no extradition treaty between the two nations.
According to foreign news reports, Djoko was granted citizenship in early 2012. The move by Papua New Guinea authorities sparked controversy in the state, with questions raised about harbouring an international fugitive.
In turn, the Papua New Guinea government in 2012 said proper processes had been followed in granting Djoko, reportedly known as Joe Chan in that country, citizenship.
Then-Indonesian president Susilo Bambang Yudhoyono urged the republic’s law enforcement to step up its efforts to bring Djoko back home to face punishment, according to The Jakarta Post in a 2012 report.
A report by Tempo magazine in 2013 quoted Indonesian deputy attorney-general Agung Darmono as saying the Papua New Guinea government had previously revoked Djoko’s passport only to return it once the businessman started investing in the country.
However, in a 2014 interview with Papua New Guinea-based newspaper Post-Courier, Djoko claimed he had been doing business in Papua New Guinea since 1972 and is “not a bad man”.
“I am a harmless man and like any other Papua New Guinean businessman, I deserve to be treated the same way,” Djoko reportedly told the newspaper in his first interview since the 2009 conviction.
More recently, Indonesian president Joko Widodo, or more commonly known as Jokowi, was approached by Djoko’s family members at a state dinner function in Papua New Guinea capital Port Moresby on May 11, according to a news report.
However, this meeting will not stop the Indonesian authorities’ efforts in pursuit of Djoko, news reports quoted Indonesian attorney-general M Prasetyo as saying on May 15, 2015.
You must be logged in to post a comment.