The New Nation - Internet Edition

BSS, Jakarta

Former Indonesian dictator Suharto transferred millions of dollars in state money from a charitable foundation he chaired to a company linked to one of his close associates, a witness told a court Tuesday.

Suharto, who stepped down in 1998 as Indonesian leader, and the Supersemar Foundation that he chaired, are facing a civil suit brought by the Indonesian government seeking 1.4 billion dollars in returned assets and damages.

State prosecutors allege the Foundation siphoned off millions of dollars in cash intended for education and social programmes to Suharto's cronies.

Achmad Kuntjoro, former finance director of Kiani Sakti, told the South Jakarta district court that the pulp and paper company received 150 billion rupiah (160 million dollars) from the Foundation.

The company was owned by Bob Hasan, one of Suharto's closest and most trusted associates.

Kuntjoro said that the Foundation gave the money to the company as a loan. But asked by the judge what kind of loan guarantee was provided, he replied: "There was no loan guarantee for that."