Guernsey’s Court approved an application to freeze EUR 36 M of the BVI-registered Garnet Investment

On January, 22 Guernsey royal court approved an application by the government of Indonesia to freeze tens of millions of dollars allegedly hidden illegally by Hutorno Mandala Putra, the son of Suharto, the country’s former dictator. The court also approved Jakarta’s bid to become a third party in the case. The Channel Island court intervened in the case where Garnet Investment, a company incorporated in the British Virgin Islands and owned by Mr Hutorno (Tommy Suharto), is suing a branch of BNP Paribas for refusing to release at least €36m ($45.6m, £23.5m), and perhaps €75m from its account.

According to Marty Natalegawa, Indonesia’s ambassador in the UK, the action by the bank BNP Paribas and the Indonesian government is based on concerns that the money was obtained corruptly.

Tommy Suharto, the owner of the BVI company involved in the case, was released from prison last October, after serving five years of a 15-year sentence for ordering the murder of an Indonesian judge who had convicted him of corruption. During his father’s rule, Tommy Suharto is said to be given many profitable contracts and businesses to run, including a clove monopoly and the company developing a national car.

Salman Maryadi, a spokesman for Indonesia’s attorney-general, has noted on Monday the corruption issue was secondary and can be dealt later on, but currently the best result would be that the court recognises Tommy’s outstanding obligations and orders.

Mr. Salman also said Indonesia was willing to seize the €36m in the Guernsey account opened in the name of BVI-registered Garnet Investment, because the authorities were not aware of any other assets.  As regards this amount, Garnet deposited money with BNP Paribas in the Channel Islands on 22 July 1998, some weeks after the fall of President Suharto which happened in May. Four years later, in October 2002, Garnet asked to transfer €36m, but the bank rejected the request. Then, according to Transparency International, Garnet tried to transfer  £47,500 and €7,960 to Peter Amy, a Garnet employee. This request also was refused.

The head of Transparency International Indonesia has said that BNP Paribas must have had good grounds to refuse the transfer requests. BNP Paribas, in its turn, denies any knowledge of the case; the requests for comments from Tommy assistants do not receive answer.

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