Suharto's lawyers prepare for the case in which he was acquited over corruption charges [AFP]

But the court has ordered that his charity foundation, Supersemar, pay about $110 mn to the Indonesian government.

The panel of judges said in the Thursday ruling that both Suharto and the foundation had engaged in "actions that ran against the law."

But they said that Suharto, represented in the case by his six children, had not been proven guilty of direct involvement.

The lawsuit against Suharto alleged corruption in the setting up and running of the tax-free foundation he established, ostensibly for charitable purposes.

Not responsible

State-owned companies and other large businesses, foreign and local, were obliged to contribute to the foundation.

Judge Wahyono said prosecutors were unable to prove the amount of immaterial damages they were demanding, but said the foundation had stolen state funds by siphoning money to companies linked to the dictator.

Wahyono, who like many Indonesians goes by a single name, ruled that Suharto could not be personally responsible because the decisions were made by the foundation board, not him.

He said it was "fair and fitting" that Supersemar return US$110 mn to the state, around 25 percent of the figure alleged to be missing in the lawsuit.

Ordering the foundation to return any more would hamper its ongoing charitable work, he said.

Family benefits

Suharto died in January without facing criminal prosecution over allegations that he oversaw massive corruption during his more than three-decade rule that benefited his family and cronies.

Suharto's family and their associates are believed to have amassed billions of dollars during Suharto's 32-year rule, according to anti-corruption group Transparency International.

The civil suit against Suharto began last year as part of a revived effort by the current government to bring him to justice.

Suharto's death in January left a mixed legacy as some see him as a hero

A criminal suit against him was abandoned in 2006 on health grounds.

Suharto's son, Hutomo "Tommy" Mandala Putra Suharto and his five siblings came to control some of Indonesia's largest conglomerates during Suharto's 32-year rule.

The children are alleged to have used their connections to secure contracts and demand kickbacks.

Absent children

There was no immediate response from Suharto's children, who were not in court to hear the verdict.

If Suharto had been found guilty, any damages would have been paid from his estate.

In previous hearings, prosecutors told the court that during the 1980s and 1990s, the Supersemar foundation paid money to companies owned by members of the Suharto family or their close associates.

These included a privately owned bank, an airline controlled by one of Suharto's sons, a logging firm, and a cooperative linked to Golkar, the political party which was run by Suharto and which is now a member of the ruling coalition.

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