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Expat Hotel Owner Jailed in Singaraja

Karl Gunther Meyer, Owner of Hotel Melka Arrested on Suspicion of Fraud and Embezzlement by North Bali Prosecutors

(2/27/2012) NusaBali reports that the expatriate owner of the Hotel Melka in Singaraja, Karl Gunther Meyer (52), is being held in the Singaraja prison in under suspicion of fraud or embezzlement involving billions of rupiahs allegedly taken from a business associate.

Meyer was taken into custody in Singaraja on Friday, February 17, 2012.

The case still under investigation dates from a complaint filed in January 2010 by a business associate of Meyer, Michael Brag. Once the Bali’s prosecutor’s office verified there was a case to be answered, the case file was sent to prosecutors in Singaraja.

Two officials from the Bali Prosecutor’s Office, Putu Astawa and A.A. Alit Swastika, said the case against Meyer stems from the sale and purchase of shares between Karl Meyer and Michael Brag for the Hotel Melka, located in Kalibubuk, Lovina, Singaraja. A sales document for the share purchase purportedly records Brag purchasing 25% of the hotel’s shares for Rp. 5.9 billion (US$655,000).

With the sales of shares the name of the hotel was changed to the Melka Excelsior Hotel Dolphin and Wildlife Resort. The prosecutors say that on one occasion Meyer introduced Brag as “one of the owners of the hotel” at a meeting attended by all the hotel’s staff.

Astawa explained that at one point in the transaction Meyer asked Brag to deposit 25% of the share purchase price or Rp. 9 billion (US$100,000). Astawa said it was later discovered after the transfer that Michael Brag was not listed as a stockholder, but instead Meyer’s wife was added to the list of shareholders.

Brag unhappiness with the situation was aggravated further when he learned that Meyer had pledged, without his knowledge, all the shares of the Hotel Melka as surety in a credit application with a local bank to borrow more than 4 billion (US$444,000).

On Friday, February 25, 2012, when the evidence file in the case was formally presented, Singaraja prosecutors immediately ordered the detention of Meyer. The chief prosecutor in Singaraja said his incarceration was in anticipation that German national might attempt to flee the jurisdiction and to facilitate the continuing investigation of the case.

Plans are for the case to be brought to trial in the near future. Meyer is charged with violation Sections 372 and 378 of the criminal code for frauds and embezzlement punishable with four years imprisonment.