Bankers interrogated<\/p>\n
The daily parade of bankers, both owners and directors,
\narriving for interrogation at the National Police headquarters
\nand Attorney General's Office since early this month has
\nunderstandably dominated newspaper headlines. For most of them
\nwere close cronies of either former president Soeharto or his
\nchildren who, during the Soeharto regime that came to an end
\nafter 32 years in May, were seen as the \"untouchables\" to law
\nenforcement agencies.<\/p>\n
It is nonetheless too early to judge as to whether the
\nauthorities are really serious about bringing the tycoons to
\ncourt even though their protector has been dethroned. Moreover,
\nthe Attorney General's Office's record in pursuing criminal
\nproceedings against corruptors has so far been disappointing,
\neither because of its lack of technical competence or because of
\nthe corrupt mentality of many prosecutors and their high
\nvulnerability to political pressure.<\/p>\n
We can recall the hurly-burly reportage of the intensive
\ninterrogation of three central bank directors immediately after
\ntheir dismissal late last December for alleged wrongdoing in the
\nissuance of trillions of rupiah in liquidity support to problem
\nbanks. Since then, neither the police nor the attorney general
\nhas announced the outcome of the investigations.<\/p>\n
However, given the strong public clamor now for the legal
\npunishment of anyone involved in corruption, nepotism, collusion
\nand crony capitalism, there is reason to be more optimistic that
\nthe authorities will be more serious and persistent in going
\nafter the recalcitrant bankers.<\/p>\n
There is another factor which, we think, has become an even
\nmore compelling reason for the government to crack down hard on
\nthe delinquent bankers: recouping the Rp 140 trillion (US$12.8
\nbillion) of liquidity support Bank Indonesia has already extended
\nto financially depressed banks. In view of the dire economic
\nconditions, huge state budget deficit and the specter of
\nhyperinflation, the government is under increasingly strong
\npressure to collect the funds as soon as possible.<\/p>\n
The central bank has set Sept. 21 as the deadline for all
\nbanks which were suspended, closed or nationalized to repay the
\nliquidity support, or else the personal assets of the banks'
\nowners in other businesses will be seized.<\/p>\n
The fact that more bankers have been summoned to the Attorney
\nGeneral's Office than to the police headquarters indicates that
\nthe central bank, at least for now, is more preoccupied with
\nrecouping its funds through civil law proceedings than with
\npursuing criminal cases against the delinquent bankers. The
\nAttorney General's Office, which has been empowered by the
\nfinance minister to process the collection of the liquidity
\nfunds, will surely be hard pressed to accomplish the task before
\nthe deadline that is only two weeks away.<\/p>\n
The settlement of the huge liquidity assistance is a test case
\nfor the authorities to prove to the general public that they are
\nreally serious about dealing objectively with the recalcitrant
\nbankers.<\/p>\n
Retrieving the huge sum of taxpayers' money from the closed or
\nnationalized banks, though necessary, is, however, not enough if
\nviewed from the perspective of justice and, more importantly,
\nfrom the broader objective of promoting sound and strong banks.
\nThe central bank and the Indonesian Bank Restructuring Agency
\nhave firmly established that the closed and nationalized banks
\nhave violated the legal lending limits by extending more than 20
\npercent of their total credits to the businesses of their owners
\nor directors. Some of the bankers have even admitted they
\ndiverted the central bank liquidity funds to other companies.
\nMohamad \"Bob\" Hasan, for example, has told police he used some of
\nthe Rp 9 trillion (US$820 million) liquidity assistance loaned to
\nhis bank -- Bank Umum Nasional -- to finance his pulp project in
\nKalimantan.<\/p>\n
These bankers should be brought to court even if they are
\nable to repay the central bank liquidity funds. The repayment
\ndoes not negate the fact that they have committed crimes. They
\nshould be prosecuted under the 1992 Banking Act that clearly
\nstipulates that violators of the legal lending limits and
\nfalsification of financial reports are liable to punishment of
\nbetween six and 15 years in jail. Only consistent law enforcement
\nwill be an effective way to force the remaining bankers to obey
\nthe law.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/bankers-interrogated-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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