Former Sritex Boss Accused of Embezzling Rp 692B in State Bank Loans
Jakarta. Former CEO of textile giant Sri Rejeki Isman (Sritex), Iwan Setiawan Lukminto, has been named a corruption suspect in a major credit fraud case involving multiple regional and state-owned banks, the Attorney General’s Office (AGO) announced Wednesday evening.
Two senior bankers -- Dicky Syahbandinata, former head of the commercial division at West Java and Banten Bank (BJB), and Zainuddin Mappa, former CEO of Bank DKI -- were also detained as suspects following an interrogation at the AGO.
“Based on our investigation, we’ve gathered sufficient evidence to name the three individuals as suspects in a corruption case,” said Abdul Qohar, Director of Corruption Investigations at the AGO.
Unsecured Loans and Misuse of Funds
According to prosecutors, BJB and Bank DKI disbursed large sums of credit to Sritex and its subsidiaries without proper due diligence or adherence to internal protocols.
“These loans were issued without proper risk assessments and in violation of standard operating procedures,” Abdul said.
He added that Sritex had also borrowed heavily from Central Java Bank and received syndicated loans from state-owned banks BNI and BRI. In total, the company owed an estimated Rp 3.6 trillion ($220 million) to state-run banks.
BJB disbursed Rp 543 billion to Sritex, while Bank DKI issued Rp 149 billion in loans -- both without collateral, prosecutors said. Iwan allegedly diverted the funds to repay personal debts and purchase property.
“Sritex had a BB- credit rating, which indicates a high probability of default. Credits without collateral apply to top-rated borrowers only,” Abdul explained, citing the 1998 Banking Law.
The alleged scheme caused the state a financial loss of Rp 692 billion ($42.3 million) in unpaid loans from BJB and Bank DKI.
Iwan was arrested at his residence in Solo, Central Java, on Tuesday evening and transported to Jakarta the following morning for further legal proceedings.
The former textile mogul made headlines in October 2023 when a court declared Sritex bankrupt. The once-dominant textile manufacturer officially ceased operations in March 2025, ending a 58-year legacy and leaving over 11,000 workers jobless, despite Iwan's earlier attempts to secure a government bailout.
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