Accounts linked to BNI scandal revealed

Accounts linked to BNI scandal revealed

The Jakarta Post, Jakarta

Nine banks have reported to the Financial Transaction and Report
Analysis Center (PPATK) that they had opened accounts belonging
to those allegedly involved in the Bank Negara Indonesia (BNI)
lending scandal, PPATK chairman Yunus Husein said on Tuesday.

The money laundering watchdog was still reviewing the reports
and it was expected that they would give those soon to the police
and attorney general's office, Yunus said.

"We aim to help the police in the case, who are in charge in
the investigation. Now we have new information from nine banks so
the police can follow it up," he told reporters, without naming
the banks nor the account holders.

Yunus attributed the banks' willingness to be transparent to
the newly amended Law on Money Laundering, which requires banks
to report any suspicious financial transactions to PPATK.

It is still unclear if the police will be able to use the
information in the investigation, although, according to the new
regulations, it should include the freezing of the accounts.

Police investigators have so far detained five people for
their alleged involvement in the BNI loan scam, with six others
on a "persons of interest" list.

Of the five suspects that have been detained, two of them are
said to be top officials with the giant publicly listed bank,
while the others are from companies that have allegedly profited
from the bogus export transactions, which, it was later proven,
had never actually occurred.

The three are Jeffrey Baso, a director of Gramarindo's unit of
PT Sri Ranu Caraka Pasifik, Afilia Widarta and Yudhi Baso, both
directors of Gramarindo and Petindo Group.

Earlier this month, the police also detained Edy Santoso, the
head of the foreign customer service division of BNI's Kebayoran
Baru branch in South Jakarta and Koesadiyono, manager of the BNI
Kebayoran Baru branch.

The BNI scandal started late last year when the bank's
Kebayoran Baru branch, without first conducting sound credit
appraisals, began to disburse letters of credit to local firms
for supposed export transactions.

Under the letters of credit (L/Cs) used by the exporters,
which were guaranteed by banks in Kenya, Switzerland and the Cook
Islands, they claimed to be exporting selected commodities to the
Republic of Congo and Kenya.

During the December 2002 to July 2003 period, the total amount
that was actually disbursed stood at Rp 1.7 trillion (US$201.18
million).

Given the huge amount of money and the fact that the foreign
banks that issued the L/Cs were not BNI correspondent banks, the
bank has been widely condemned for its poor internal controls,
although BNI president Saifuddien Hasan blamed it on collusion
between the debtors and certain BNI officials.

Meanwhile, Suad Husnan, a deputy at the Office of the State
Minister For State Enterprises which oversees financial services
and the banking industry, said on Tuesday that his office
expected to receive by the end of this week reports from a bank's
internal team regarding the case.

"We have yet to receive the reports. But, we expect to receive
them this week, Friday at the latest," Suad said.

An internal team, comprised many of the bank's commissioners,
has been established to look into the case and give
recommendations to the state enterprises office as to what
actions should be taken to punish those involved in the scandals,
as well as how to return the money.

Suad also did not rule out suggestions to add three more
commissioners to the current four, in a bid to strengthen the
bank's supervisory and control roles.