Attorney General Office (AGO) has launched an investigation into an allegedly dubious contract signed between shopping mall operator PT Grand Indonesia and state-owned hotel operator PT Hotel Indonesia Natour which may have caused potential state losses of Rp 1.3 trillion (US$96.25 million).

"The Grand Indonesia case is being investigated. The suspect has not been determined but we have increased the case status to investigation," Attorney General HM Prasetyo said at the State Palace on Thursday.

"All parties will be summoned. [The investigation] will develop," he said.

The Supreme Audit Agency (BPK) had warned the government over $96.25 million in potential state losses relating to a cooperation between Hotel Natour and Grand Indonesia.

The partnership was initiated between Hotel Natour and PT Cipta Karya Bumi Indah'€”owned by Djarum group'€”to develop Hotel Natour'€™s land bank near Hotel Indonesia through a build, operate and transfer (BOT) agreement.

However, the agreement was violated and may lead to state losses as a result of contract period revision, low compensation rate against income percentage and the use of right to build (HGB) certificate as a debt collateral, the BPK said in an audit report.

Grand Indonesia, according to the BPK report, became the new contract holder in the revised agreement and registered the HGB certificate as collateral to obtain bank loans, in contravention of the prior agreement. (ags)(+)

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