Jakarta - An Indonesian court on Wednesday threw out a multimillion-dollar lawsuit against a son of late president Suharto over a business deal involving a failed national car project.

The Finance Ministry had sought 4 trillion rupiah (340 million dollars) in damages from Hutomo Mandala Putra, better known as Tommy Suharto, and his companies.

PT Timor Putra Nasional, set up by Tommy Suharto to build a homegrown car, defaulted on its loans to national banks after the 1997-98 Asian financial crisis.

But in 2003, Timor's assets were sold to a little-known company called Vista Bella Pratama by the Indonesian Bank Restructuring Agency, which managed Timor's assets after the carmaker defaulted.

Prosecutors argued that the transaction violated Indonesian laws because both the seller and buyer were controlled by the same individual, Tommy Suharto.

But judges at the Central Jakarta District Court disagreed.

"The defendants did not commit acts that were against the law nor caused losses to the state," Judge Reno Lestowo said.

President Suharto stepped down in 1998 amid the financial crisis and widespread unrest after ruling the country with an iron fist for 32 years.

Under his rule, corruption was considered endemic and members of his family and friends enjoyed privileges in business.

After resigning, Suharto, who died in January 2008, was charged with embezzling hundreds of millions of dollars, but he escaped trial, pleading ill health. (dpa)