Australian firm to help BI audit

JAKARTA (JP): Supreme Audit Agency (BPK) head Satrio B. Yudono said on Thursday he would ask Australia-based PricewaterhouseCoopers to help the agency audit the central bank over the high-profile Bank Bali scandal.

However, Yudono said the audit would focus on the government's blanket guarantee program for interbank claims in an effort to prevent a similar incident in the future.

"We are inviting (PricewaterhouseCoopers to help with the audit) in order to resolve the case once and for all," he told reporters after meeting with President B.J. Habibie.

"But the important thing is to focus on the system ... to know what needs to be modified, without getting carried away with the political aspects of the case. We have to be careful," he said.

The narrowly focused audit described by Yudono appears to be a far cry from the comprehensive audit demanded by the public, the House of Representatives and the international community.

According to the new central bank law, Bank Indonesia can only be audited by BPK. However, the agency can ask for the assistance of an external auditor.

The law also stipulates that the House can request BPK conduct a special audit of Bank Indonesia.

The House formally made such a request on Thursday, asking BPK to audit the central bank over the Bank Bali scandal.

The head of House Commission VIII for finance and banking, Tayo Tarmadi, said BPK was expected to complete its audit by the end of August.

"We want the audit to be completed by Aug. 31," he said following a meeting with House leaders.

Tayo insisted the BPK audit must not simply focus on the government's interbank claims guarantee system, but check the transfer of funds from Bank Indonesia to Bank Bali, and the flow of funds from Bank Bali to other bank accounts.

Minister/State Secretary Muladi said the BPK and PricewaterhouseCoopers audit would be completed on Sept. 7.

It was the International Monetary Fund (IMF) which first demanded the central bank be audited by PricewaterhouseCoopers.

IMF deputy managing director Stanley Fischer asked the government on Aug. 17 to widen the scope of PricewaterhouseCoopers' investigation into the Indonesian Bank Restructuring Agency (IBRA) to include Bank Indonesia.

The IMF demanded a probe into Bank Indonesia's role in the Bank Bali case, as well as an investigation into the flow of funds from Bank Bali to other bank accounts.

IMF Asia Pacific director Hubert Neiss reiterated on Thursday that a speedy and satisfactory resolution of the Bank Bali case was crucial to restoring confidence in the economy and preventing the country's bank restructuring program from faltering.

Neiss was speaking to reporters after meeting with Habibie.

The scandal centers on the transfer of Rp 546 billion (almost US$80 million) from Bank Bali to PT Era Giat Prima (EGP) in June. The money was a commission for the company's aid in helping Bank Bali recoup interbank claims from closed Bank Dagang Negara Indonesia (BDNI).

IBRA has faulted the bank for using EGP because the interbank claims were assured through the government's blanket guarantee program. The transfer of funds from Bank Bali would have increased the cost to the state budget for recapitalizing the bank.

Indonesian banking authorities have said the payment of the interbank claims to Bank Bali were made according to existing procedures. IBRA said the interbank claims were verified by Bank Indonesia.

There have been allegations influential people close to President Habibie "forced" former Bank Bali president Rudy Ramli to hire EGP as part of an effort to raise funds to finance Habibie's presidential bid.

EGP is a general trading company owned by businessmen linked to the ruling Golkar Party, which has named Habibie its presidential candidate.

Bank Indonesia deputy governor Subarjo Joyosumarto said on Thursday a crime was committed in the Bank Bali case, the first such official acknowledgement since the scandal broke in late- July.

"We have just given the police the results of BI's investigation into the Bank Bali case, in which a banking crime was committed," Subarjo said after meeting with officers from the National Police and officials from the Attorney General's Office.

Subarjo said the failure to report the payment to EGP to banking authorities was evidence of a violation of banking laws by Bank Bali's management.

In a related development, National Police chief Gen. Roesmanhadi said on Thursday the police obtained permission from the President to question EGP president Setya Novanto as a suspect in the case. As a member of the People's Consultative Assembly, Setya can only be questioned with the prior consent of the President. (rei/prb)