Two former employees of Indonesian state-owned Bank Mandiri have been sentenced to jail for embezzling Rp24 billion (US$2.5 million) from the bank.

An Indonesian court heard that the pair failed to exercise "due caution" when they issued letters of credit (L/Cs) via a branch of the country's biggest bank to three business people.

Fictitious L/Cs

Former Magelang branch head Tuti Andrasih and former operations manager Indarto Kusumo were both found guilty of banking malpractice.

The court heard that the pair had failed to follow the principle of exercising due caution when they knowingly issued fictitious L/Cs to three business people.

Appeal

They were named as Yani Yatindra Sumarsono, Hikmat Subiadinata and Wawan Hermawan but none of them were called as witnesses in the trial.

Defence lawyers say they will appeal against the verdicts on Andrasih and Kusumo because they said they would appeal the verdict because the three potential witnesses had not testified in the trial.

Sentences

The presiding judge said the two former bank employees had been "legitimately and convincingly" found guilty of violating banking laws amended in 1998 to provide tougher penalties against embezzlement.

Each of the convicted men was sentenced to four years in jail. They were also fined Rp5 billion and ordered to pay court costs of Rp7,500.

Corruption crackdown

The sentences were less harsh than the seven-year jail terms the prosecution had called for and lighter than some of the tough sentences handed down in Indonesia's campaign against corruption in recent cases such as the US$200 million Bank Negara Indonesia L/C frauds (DC World News 4 November 2003 & 6 November 2003).

The judge said the two former Bank Mandiri employees were spared heavier sentences because they co-operated with the court.

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