The Attorney General’s Office (AGO) has named Iwan Setiawan Lukminto, former president director of textile giant PT Sri Rejeki Isman (Sritex), as a suspect in a major corruption case involving State bank loans totaling more than Rp3.58 trillion (US$225 million).

The indictment, announced on Wednesday, May 21, 2025, centers on the alleged misuse of working capital loans extended by PT Bank Pembangunan Daerah Jawa Barat dan Banten (Bank BJB) and PT Bank DKI to Sritex and its subsidiaries between 2020 and 2022. Prosecutors allege that the loans were granted in violation of prudent banking regulations and were later misappropriated.

“In light of sufficient evidence, we have named three individuals as suspects in the corruption case concerning the issuance of credit facilities to Sritex by Bank BJB and Bank DKI,” Abdul Qohar, Director for Investigation at the Office of Junior Atorney General for Special Crimes (Jampidsus), told a press conference on Wednesday, May 21, 2025, evening.

Alongside Iwan, former Bank DKI president director Zainuddin Mapa and former head of corporate and commercial division at Bank BJB Dicky Syahbandinata were also named suspects in the case.

According to prosecutors, the outstanding balance of non-performing loans from the implicated banks as of October 2024 reached Rp3.58 trillion. They includeRp395.66 billion from Bank Jateng, Rp543.98 billion from Bank BJB, Rp149.79 billion from Bank DKI, Rp2.5 trillion from a syndicate of state lenders: Bank BNI, Bank BRI, and LPEI (Indonesia Eximbank).

The AGO further revealed that Sritex had also taken loans from 20 private banks, though details on those institutions were not disclosed.

Violation of banking regulations

Investigators said the loan approvals violated multiple banking regulations, including the banking law and internal standard operating procedures. A key point of concern was Sritex's credit rating, which reportedly stood at BB–, indicating a higher risk of default.

“Credit without collateral should only be granted to borrowers with a minimum A rating,” Qohar emphasized.

In Sritex's case, the loans were issued without sufficient collateral and failed to meet basic prudential standards. Moreover, the credit funds were allegedly diverted from their intended use as working capital and instead used to repay debts and purchase non-productive assets.

“As a result, the loans became non-performing and the pledged assets were insufficient to recover the losses. Some assets weren’t even used as collateral at all,” Qohar cited.

The case has sparked renewed scrutiny over governance and risk management in Indonesia’s banking sector, particularly regarding state-owned and regional development banks. The AGO’s move underscores growing efforts to enforce stricter accountability for financial institutions and corporate borrowers amid rising concerns about systemic risk.

As investigations continue, the AGO has not ruled out the possibility of additional suspects or financial institutions being implicated.

“This is a complex case with wide-ranging implications. We are committed to pursuing justice and recovering losses to the state,” Qohar concluded.