A suspected Indonesian letter of credit (L/C) fraudster's refuge may become an unsafe haven if Jakarta succeeds in persuading Singapore to sign an extradition treaty, albeit by employing some apparently strange tactics.

Indonesia has been negotiating for an extradition treaty with Singapore for 34 years but so far the city-state has refused to sign one. This has led to Singapore becoming a favourite destination for Indonesian tycoons who feel the net closing in on them at home for whatever reason.

Negotiations

Indonesia wants to try - amongst dozens of others - several bankers who allegedly took part in a scheme that drained more than US$13.5 billion out of the recapitalisation lifeline thrown by Indonesia's Central Bank to 48 ailing banks during the 1997- 98 Asian financial crisis.

But these high profile suspects are just a small constituency within a population of around 18,000 Indonesians worth an estimated US$87 billion who may be living in Singapore.

Sand storm

Now the Indonesians appear to upping the political pressure on Singapore to sign an extradition treaty by delaying barges full of sand destined for the city-state.

Singapore needs sand. In 1960, the island measured just 581.5 square kilometres (sq km). Now it occupies around 650 sq km due to reclamation work. It wants to reclaim a further 100 sq km of land by 2030, but it needs sand to do this.

L/C fraud suspect

Jakarta may be most vexed by the bankers who allegedly swindled the Central Bank's recapitalisation lifeline, but the Indonesian authorities would like to bring other people who have taken refuge in Singapore to trial too.

One of these is Maria Pauline Lumowa, who headed PT Gramarindo Mega Indonesia and is the suspected mastermind of a scam that used allegedly fictitious L/Cs to drain up to US$200 million from state-owned Bank Negara Indonesia. She fled to Singapore before trial.

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