JAKARTA, 12 May 2005 - Prosecutors investigating a graft case reportedly involving 1.3 billion dollars in loans from Indonesia's largest lender have named three state-bank executives as suspects. Bank Mandiri's president ECW Neloe, vice president I Wayan Pugeg and corporate banking director Sholeh Tasripan were Wednesday declared suspects in the corruption case, the attorney general's spokesman Suhandoyo told AFP.

"There is enough preliminary evidence to indicate that these Mandiri executives were involved in the case," Suhandoyo said. No immediate orders had been given to detain them, he added. Bank Mandiri, which has appointed five law firms to defend the executives, on Thursday pledged to cooperate with the Attorney-General's Office and asked observers to respect the "innocent-until-proven-guilty principle".

The investigation, one of the biggest into an Indonesian financial group since the 1997-98 Asian currency crisis, is widely seen as a test of President Susilo Bambang Yudhoyono's declared commitment to stamp out endemic corruption. Prosecutors are investigating 1.0 trillion rupiah (105.2 million dollars) in Bank Mandiri loans in a first batch of 28 cases involving 24 companies.

The probe was sparked by a Supreme Audit Board report on Bank Mandiri loans worth 12.2 trillion rupiah (1.3 billion dollars) to 22 debtors. Attorney-General Abdul Rahman Saleh has reportedly said that some credits extended by the bank were engineered to become non-performing from the start. So far, prosecutors have detained four executives at debtor companies and questioned executives at four more.

Bank Mandiri on Thursday sought to reassure its customers that the investigation would not affect its operations. "As a listed company, Bank Mandiri is committed to fulfill its obligations, including providing service to its customers. We encourage our customers to remain calm as our operations remain unaffected," the bank said in a statement.

Bank Mandiri shares actually rose 30 rupiah to 1,690 in morning trade, in line with broader market gains and on hopes for top management changes in the bank, dealers said.

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