The accused Indonesian leader is Widjanarko Puspoyo, former Chief of Bulog, the national logistics agency. According to Jakarta Post, Indonesian police, when investigating cases related to the official, discovered what are thought to be wrongdoings linked to SFC.

Mr Widjanarko Puspoyo was arrested on March 20, 2007 for allegedly receiving a bribe in an affair of importing cattle from Australia in 2001, which caused Indonesia’s state budget a loss of $1.2mil.

It is said that SFC spent $1.5mil to give Bulog officials a ‘gift’ in return for the acceptance of the agency to buy rice from SFC.

In response to the accusation of bribery, on April 4, SFC’s spokesman stated that the corporation would not get involved in the bribery cases of Bulog’s former chief.

“It was simply the contract between us and Bulog on selling and purchasing rice. We did not spend any sum of money which could be seen as a bribe,” Cao Thi Ngoc Hoa, Deputy Director General of the Southern Food Corporation (SFC), stated.

Mrs Hoa said that in 2001, the Governments of Vietnam and Indonesia (Mrs Megawati was then President) came to an agreement on rice exports from Vietnam to Indonesia. SFC was later assigned to be the company which implemented the contract on exporting rice to Indonesia. Bulog represented Indonesia in the affair.

Mrs Hoa said that the contract on exporting rice to Indonesia was signed under the witness of the ministries of trade and foreign affairs of the two countries.

She added that Vietnam won the tender to sell 500,000 tonnes of rice to Indonesia at that moment, and the deal was implemented in accordance with the preferential regime approved before between the two governments.

The Indonesian side could pay for the 500,000 tonnes of rice under the referred method instead of prompt payment. The preference was offered as a reward with gratitude for the Indonesian side for its assistance at the time when Vietnam had to import rice from Indonesia.

Mrs Hoa was very surprised when she was asked about the accusation of bribery reported by Indonesian newspapers. She said that she could not understand why Indonesian press agencies had given such information.

She added that the Indonesian investigation agency had not contacted SFC to clarify the information reported by Indonesian newspapers.

“We are planning to contact the Vietnamese Embassy in Indonesia to learn more about the case and the information related to SFC,” Mrs Hoa said.

She has also revealed that SFC has checked the documents and bills related to the rice export deals six years ago. The corporation will check the money remittance abroad.

Regarding the response from the Government of Vietnam on the case, a source from the Government office said that it was a business contract between the two partners, and it must be settled by the two partners themselves.