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1st LD-Writethruu: Indonesian house speaker resigns after extortion scandal

Xinhua, December 16, 2015 Adjust font size:

Indonesian House Speaker Setya Novanto resigned on Wednesday after being alleged of extorting shares of U.S. firm Freeport McMorant Inc., a member of parliament ethic council announced.

In the scandal, Novanto allegedly tried to extort 20 percent stake worth about 4 billion U.S. dollars in PT Freeport Indonesia, a subsidiary of Freeport McMorant, in exchange for assisting the firm to get operating contract extended.

"I state my resignation as House Speaker for period of 2014 to 2019," Novanto said in his letter to the ethic council read by Sufmi Dasco Ahmad, a member of the council.

Just before the resignation, a hearing of the ethic tribunal council of the parliament said that the house speaker violated the ethical code for senior officials leading the house of representative.

Novanto was reported to the parliament ethic tribunal council by Energy Minister Sudirman Said last month.

In an audio recording submitted by the minister, the house speaker was purportedly demanding stake in PT Freeport Indonesia, saying that the shares should be channeled through him, for free, to be given to President Joko Widodo and Vice President Jusuf Kalla.

The recording was secretly made by Maroef Sjamsoeddin, head of PT Freeport Indonesia, during a private meeting with Novanto, who was accompanied by Indonesian prominent oil businessman Muhammad Reza Chalid.

Both President Widodo and Vice President Kalla denied any knowledge of the episode.

Freeport McMorant controls over 90 percent of the stake in its Indonesia's subsidiary.

Indonesia has scrambled to fight against seismic corruption, as scores of officials from active central bank governor to lawmakers have been sent to jail and undergoing legal process for charge in graft.

PT Freeport Indonesia's Grasberg mining, in Papua province of eastern Indonesia, is the world's largest gold mine and the world's third-largest copper mine.

The company officials have been negotiating with President Widodo's administration to extend the contract, which expires in 2019, until 2041. Endit