Bank Aspac ignored BI warning: Witnesses

JAKARTA (JP): The court trying a former Bank Aspac director charged with corruption heard on Monday the bank continued to misappropriate the government's liquidity support funds despite warnings from the central bank.

Hifni Arkian, the director of Bank Indonesia's auditing directorate, testified at the South Jakarta District Court that Bank Aspac ignored the central bank's warnings not to misallocate the Rp 1.5 trillion in funds it received to help settle its liquidity problems.

Hendrawan Haryono, along with former Bank Aspac president Setiawan Harjono, are accused of misappropriating Rp 583.4 billion (US$63.4 million) of the liquidity support funds from February 1998 to February 1999.

The witness said that based on an initial audit, Bank Indonesia first warned Bank Aspac on Dec. 28, 1998, not to channel any of the liquidity support to companies affiliated with the bank's owners, shareholders, commissioners or members of the board of directors.

Hifni said he was not aware of Bank Aspac's true financial condition until he received the results of a second audit on Feb. 16, 1999.

The central bank repeated its warning to Bank Aspac on Feb. 17.

He said that after learning of Bank Aspac's financial condition from the second audit, he called a number of Aspac's directors on March 4 and rebuked them for misallocating the liquidity support funds.

Hendrawan, the bank's former director of credit, also is accused of allocating a portion of the support funds for foreign exchange trading and to finance the operations of several corporations affiliated with Bank Aspac.

Both Hendrawan and Setiawan were arrested last April.

Setiawan, who will be tried separately, has yet to appear in court because he is being treated at Mitra Keluarga Hospital in East Jakarta.

Prosecutor Sidik Latukonsina charged Hendrawan, 46, with corruption, which carries a maximum sentence of life imprisonment.

The Bank Aspac officials are the first to be taken to court for misappropriating the government's liquidity support funds. Attorney General Marzuki Darusman said earlier his office planned to take legal action against officials from several other banks, including Bank Central Dagang, Bank Dewa Rutji and Bank Orient.

These are among the 39 banks closed down by the government last year for violating banking rulings and for the inability of their owners to provide the necessary capital to help finance the recapitalization of their banks.

The hearing will resume next Monday, at which time the court is scheduled to hear testimony from other witnesses. (01)