Tue, 01 Sep 1998

Attorney General begins banking investigations

JAKARTA (JP): The Attorney General's Office has started the process of investigating the management and owners of 14 troubled banks receiving more than Rp 102 trillion (US$9.3 billion) in Bank Indonesia liquidity support.

Bank Indonesia directors Iwan Prawiranata and Achyar Ilyas met with senior officials of the Attorney General's Office on Monday but declined to give out any significant information to reporters.

"We're just discussing ways on how to recover BI's liquidity support quickly," Achyar said.

Several bank owners and top officials attending the meeting also attempted to avoid journalists' questions.

Minister of Finance Bambang Subianto has formally asked the assistance of the Attorney General's Office in recovering the central bank's liquidity support.

The government suspended seven banks in January and another three banks last month in an effort to clean up the ailing industry. It has also taken over four banks, including Bank Central Asia, the country's largest private bank, and Bank Danamon.

The 14 troubled banks have been given until Sept. 21 to return the central bank's money.

Deputy Attorney General Soehadjono declined to comment about the presence of the bankers at his office.

"I don't know why they're here. Why don't you just ask them yourself," he told reporters.

Benny Suherman, owner of the suspended Bank Subentra, and Samadikun Hartono, who controlled the suspended Bank Modern, were seen being chased by reporters. They apparently managed to get away without answering any questions.

Deputy Attorney General for special crime Antonius Sujata said that even if the banks returned the money, his office would still investigate them for suspected banking crimes.

"Returning the state's assets doesn't mean that they'll be free from suspicion of certain crimes," he was quoted by Antara as saying.

The bank owners and management have allegedly violated legal lending limits by channeling most of their bank funds into affiliated business groups. (rei)