BUN abused Rp 5 trillion of liquidity support<\/p>\n
JAKARTA (JP): Tycoon Kaharudin Ongko and banker Leonard
\nTanubrata of the now defunct Bank Umum Nasional misappropriated
\nmore than Rp 5 trillion (US$476 million) of Bank Indonesia
\nliquidity support funds to finance affiliated businesses,
\nprosecutors said on Monday.<\/p>\n
Attorney General's Office spokesman Muljohardjo revealed that
\ninvestigators found that the two suspects had violated banking
\nrules by continuing to avail of the liquidity funds despite the
\nbank's precarious financial situation.<\/p>\n
"Ongko, as the vice chairman of the bank's board of
\ncommissioners, knew about the condition in which the bank found
\nitself but continued to draw on liquidity support funds to
\nfinance his own companies which were also facing financial
\nproblems at the time.<\/p>\n
"Meanwhile, the investigators have discovered that Tanubrata,
\nas BUN president director, approved the loans to companies
\naffiliated with the Ongko group," he told journalists.<\/p>\n
The Ongko group owns several businesses, including life
\nassurance, banking and finance companies, as well as a ceramic
\ntile maker.<\/p>\n
The convicted magnate Mohamad "Bob" Hasan, who was a
\ncommissioner of the now defunct bank, is also a suspect in the
\ncase.<\/p>\n
The liquidity support funds, known as BLBI, were supposed to
\nonly be used to reimburse depositors after massive runs hit the
\nbanking industry during the bleakest period of the economic
\ncrisis in 1997.<\/p>\n
Some Rp 144.5 trillion (US$14.45 billion) of the liquidity
\nsupport funds were channeled to 48 banks between 1997 and 1999.<\/p>\n
According to an investigative audit conducted by the Supreme
\nAudit Agency (BPK), more than Rp 138 trillion, or 95 percent of
\nthe funds, were either misused or were extended in violation of
\nbanking regulations.<\/p>\n
Another prosecutor revealed that BUN received some Rp 12.067
\ntrillion in liquidity support funds from the central bank between
\nDec. 22, 1997 and June 15, 1998.<\/p>\n
The suspects allegedly misappropriated more than Rp 5
\ntrillion.<\/p>\n
"We are still calculating the total losses suffered by the
\nstate in this case," the prosecutor, who requested anonymity,
\ntold journalists at his office.<\/p>\n
He said that Ongko and Tanubrata had yet to be detained and
\nthat this was part of a strategy being pursued by the
\nprosecutors.<\/p>\n
"We know what we're doing. Just wait and see ... to detain a
\nsuspect is easy but we have to consider everything involved in
\nthe investigation," he said.<\/p>\n
The source added that the irregularities were only possible
\ndue to the lax supervision conducted by the central bank which at
\nthe time applied an open door policy in channeling the emergency
\nloans to commercial banks.<\/p>\n
"Each bank received different treatment. The BI directors
\nseemed to overlook the irregularities and allowed the banks to
\ntake the loans without issuing them with warnings, even if they
\nfailed to meet the conditions imposed, including a healthy
\nbalance sheet.<\/p>\n
"Moreover, some of the (ailing) banks even asked the (BI)
\ndirectors for such facilities," he added.(bby)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/bun-abused-rp-5-trillion-of-liquidity-support-1447893297",
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