Jakarta. A Jakarta judge on Thursday rejected a motion by Karen Agustiawan, the former chief executive officer of state-run oil company Pertamina, who seeks to challenge her naming of a graft suspect related to the company’s liquefied natural gas procurement while she was in office.

Judge Tumpanuli Marbun ruled that the Corruption Eradication Commission (KPK) had breached no rules in initiating the criminal investigation and naming Karen a suspect for the alleged fraudulent LNG project in Pertamina in 2011-21.

The KPK has proved in the previous hearings that it has “followed all the existing procedures” in the criminal investigation and “accordingly, the motion by the plaintiff is groundless and must be rejected”, the judge read the verdict at the South Jakarta District Court.

Karen has argued that the LNG procurement was purely a business decision and wasn’t tantamount to corruption, while also disputing KPK’s estimation of a substantial financial state loss in the procurement.

However, the judge ruled that the commission followed the appropriate procedures in determining a state loss and initiating a graft investigation based on that.

A pre-trial motion merely challenges the procedures in the arrest or the identification of a suspect by law enforcement officials without examining evidence and witnesses’ accounts of the actual criminal charges.

However, if the lone judge found law enforcement officials guilty of breaching the Criminal Procedures Code, he can order the immediate cease of the ongoing investigation and the release of the suspect.

In most cases, the judge would reject the motion and allow the actual trial presenting prosecutors and witnesses to proceed.

Karen was detained on September 19 over accusations that she had unilaterally signed an LNG purchase deal with the American company Corpus Christi Liquefaction (CCL) in 2012. 

This contract was made "without prior analysis and the consent of Pertamina's board of commissioners," KPK Chairman Firli Bahuri has said.

Even the government, as the main shareholder, was not informed about this transaction, the KPK alleged. Due to an oversupply of LNG in the domestic market and a lack of demand at that time, Pertamina had to sell it in foreign markets at a loss, resulting in a financial loss of $140 million to the state, according to Firli.

This is not the first time Karen, who served in the company from 2009 to 2014, has faced legal issues related to Pertamina's business agreements with foreign firms. 

On June 10, 2019, she was sentenced to eight years in prison for another corruption case investigated by the Attorney General's Office.

In that case, she was accused of misusing her authority to decide on acquiring a participating interest in Australian-based Basker Manta Gummy's oil fields in the Gippsland Basin in the Australian state of Victoria without prior feasibility studies or risk assessments.

Corruption charges were brought against Karen when it was discovered that Pertamina failed to earn financial benefits from the agreement after the oil block operator, Roc Oil Company, halted production in the fields on Aug. 20, 2010. 

The Attorney General's Office argued that the deal was reached without the consent of the company's board of commissioners and resulted in significant financial losses to the state.

However, in March 2020, the Supreme Court ruled that Pertamina's failure to benefit from a 10 percent participating interest worth $31.5 million in the oil fields did not cause financial losses to the state, leading to Karen's acquittal.