T

he Attorney General’s Office (AGO) has banned PT Indosat Mega Media (IM2) president director, Indar Atmanto, from traveling overseas after he allegedly abused a broadband frequency law that may have caused Rp 3.8 trillion (US$425 billion) in state losses.

The case may also implicate officials from publicly listed PT Indosat, IM2’s parent company, and the Communications and Information Ministry, the AGO says.

AGO spokesman Noor Rachmad said, after naming Indar as a suspect last week, that investigators at
the AGO’s special crimes division had found evidence to name new suspects.

Noor, however, refused to confirm whether the new suspects were from the ministry or Indosat, although he acknowledged the ministry and the firm were both involved in the case.

Communication and Information Ministry spokesman Gatot S. Dewo Broto, meanwhile, played down the investigation, questioning the AGO’s move to name Indar a suspect.

“We urge the AGO to explain the case openly and in detail as soon as possible because it may pose uncertainty among telecommunication industry players,” Gatot said on Monday.

He added that some ministry officials, including Gatot himself, had been questioned by investigators in the case. However, Gatot said he did not know if the AGO would also name ministry officials suspects. “We respect the legal process,” he said.

The AGO has charged Indar with corruption for his role in IM2’s alleged “non-procedural” use of 3G broadband frequencies, which the AGO claims caused Rp 3.8 trillion ($425 million) in lost tax revenue.

Indar, who is also Indosat’s chief of corporate services, is charged with violating articles 2 and 3 of the Anticorruption Law by benefiting the company and causing state losses.

Mobile broadband provider IM2 is a subsidiary of Indosat, the nation’s second-largest telecommunications operator, which won a bloc of 3G broadband frequencies worth Rp 160 billion in 2006, according to Gatot.

Indosat has more than 40 million subscribers.

Indosat, however, let the broadband frequency it had secured from the government be operated by IM2 under a cooperation deal in 2007.

This scheme, according to the AGO, violated the 1999 Telecom-munications Law as well as the 2006 Communication and Information ministerial regulation on 2.1 GHz Frequency Band Usage for Mobile Networks, resulting in discrepancies in telecommunication service usage tax revenues, leading to state losses.

Under the provisions, mobile broadband service providers must have their own 2.1 GHz/3G network license to provide a 3G service.

Indonesia Telecommunication Consumers (KTI), the NGO which first filed a complaint about the alleged illicit practice, said it believed that Indosat should have not handed over the use of the frequency bloc to its subsidiary.

The consumer group said IM2 should have secured its own broadband frequency from the government because the tax rate for a public company like Indosat was different from that for IM2, a private company.

Gatot, however, defended Indosat’s decision. “The 2000 Government Regulation and 2001 Ministrial Decree on Telecommunication Service Management say that telecommunication firms like Indosat are allowed to rent frequencies to service providers like IM2,” he said.

The Indonesian Telecommunications Regulatory Body (BRTI) has also echoed Gatot’s statement, saying that the Indosat-IM2 deal on the 3G frequency was procedural.