Dahlan Iskan, the former Minister of State-Owned Enterprise during President Susilo Bambang Yudhoyono administration, as named a suspect by the East Java High Prosecutor in relation to the suspected corruption in the sale of assets of PT Panca Wira Usaha (PWU) in 2003. Dahlan Iskan was then the CEO of PT PWU.

The East Java High Prosecutor sees that there are two issues in the sale of PT PWU assets. First, that the sale was in violation of procedures as it was done without the approval of the Regional Parliament (DPRD) plenary. Second, the assets of PT PWU were sold below the Tax Object Sale Value (NJOP) that was applicable at the time.

The East Java High Prosecutor refers to East Java Bylaw 5/1999 regarding Merger of Five Region-Owned Enterprises and the Change of Legal Entity of PT PWU. Article 14 stipulates that the release of PT PWU fixed assets can be done subject to approval by DPRD. The question is: has Dahlan Iskan secured the approval of DPRD?

On 6 March 2002, Dahlan Iskan sent letter No. 38/ PWU/ 02/III/2002 to East Java DPRD requesting the approval to sell assets of PT PWU and asking the parliament to clarify whether it would be sufficient to decide the release of assets at the General Meeting of Shareholders as stipulated in Law Number 1 of 1995 regarding Limited Liability Corporations.

In response to the letter, on 24 September 2014, the Head of East Java DPRD Bisjrie Abdul Djalil sent letter No. 593/6083/040/2002 to the Governor of East Java explaining that the sale of PT PWU assets shall refer to the Law on Limited Liability Corporations. That decision is consistent with the discussion at the Hearing between Commission C of DPRD and PT PWU. Dahlan Iskan also received a green light from the Governor of East Java, Imam Utomo, via letter No. 539/10546/022/2002 of 23 December 2002. Imam Utomo ordered the release of assets that are seen as a liability and are no longer productive.

Based on the above chronology, Dahlan Iskan has followed the procedures set out in Bylaw 5/2009, namely, asking DPRD’s approval. However, as the Head of DPRD explained, such an approval is not necessary and it would be sufficient to decide the sale of assets in the GMS, although it should be informed/consulted with the DPRD.

As far as causing state losses as a result of assets being sold under NJOP value, Dahlan Iskan explained that the condition of assets were in disrepair, run down, and inoperable. What needs to be established here is whether selling assets below NJOP value can be allowed due to certain conditions. In addition to that, the mens rea needs to be established to determine whether Dahlan Iskan can be named a suspect in the case of PT PWU asset release. Was Dahlan Iskan fully aware or did he intend to violate procedures and cause state losses?***