Indonesia, HK near deal on ill-gotten funds - report

HONG KONG (Reuters) - Hong Kong and Jakarta are close to signing an agreement that would allow Indonesia to pursue misappropriated money that was stashed in bank accounts in Hong Kong, the South China Morning Post reported on Sunday.

The newspaper said Indonesia and Hong Kong will sign a mutual legal agreement (MLA) on criminal matters at a conference scheduled for November in Bali.

"There are many, many cases and we are waiting for the support of the MLA to pursue them," Yan Genmarengga of the Indonesian Attorney-General's Office, who is based in Hong Kong, was quoted in the newspaper as saying.

"We have some general cases involving hundreds of millions of (U.S.) dollars. The MLA will make it easier for Hong Kong and Indonesia to pursue the money," he was quoted as saying.

Yan could not be reached for comment on Sunday.

A spokesman for the Department of Justice in Hong Kong told Reuters, "the agreement is still in process", but did not give a timetable.

Indonesian President Susilo Bambang Yudhoyono has promised to clamp down on graft in a country that is regularly rated one of the world's most corrupt, and has been pursuing the recovery of illegally obtained funds.

The newspaper said a likely target would be an estimated US$800 million in funds in Hong Kong that were held by Hendra Rahardja, the late chief of now-defunct Bank Harapan Sentosa, who was convicted in 2002 and sentenced to life in a graft scandal involving the disbursement of an emergency loan by Indonesia's central bank.

Last week, the United Nations and the World Bank launched an initiative to make it easier for governments in developing countries to recover stolen assets stashed in overseas by corrupt leaders.

The World Bank estimates that the cross-border flow of global proceeds from criminal activities, corruption and tax evasion is between $1 trillion and $1.6 trillion.