Indonesian parliament speaker Setya Novanto quit his job on Wednesday night after being accused of extorting stakes in an international mining company.

Reports have mentioned that Novanto has demanded shares worth US$1.8 billion (AU$2.5 billion) from mining giant Freeport McMoran to ensure extension of its contract. The speaker’s decision came following the verdict on his actions given by a parliamentary ethics committee.

Novanto has denied the allegations and said that he used the name of President Joko Widodo in dealing with the mining company. Anti-corruption group Transparency International has called the case as one of the most corrupt ones in the country. The unit also said that this could hamper the level of trust of investors on the Indonesian economy.

"To preserve the dignity and honour of Indonesia's House of Representatives, and to create public order, I hereby declare my resignation as chairman of the House of Representatives for the period of 2014-2019," Novanto said in a letter to a parliamentary committee.

Prior to making the letter public, 15 members of the committee announced their views on the conduct of the speaker. Nine of them held him guilty of “moderate ethical violations,” while the other six held him responsible for “heavy ethical violations.”

One of the members of the parliamentary ethics committee, Sarifuddin Sudding, said that the letter was enough to prompt closure of the case. At the hearing, audible evidence was presented that recorded the top-secret deal between the speaker and the mining company. In the voice recording, Novanto was found demanding 20 percent stake from the miner.

The recording also proved the speaker comparing himself close to the Indonesian president and senior minister Luhut Pandjaitan. “So many times when it comes to matters of the Parliament, we’re always a triangle, Luhut, the president and I,” the recording was heard, as quoted by the ABC.

After listening to the allegations and criticism from colleagues for long hours, Novanto tendered his resignation.

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