Fri, 15 Dec 2000

Bank Aspac misallocated BLBI funds: Witnesses

JAKARTA (JP): Two Bank Indonesia officials said on Thursday that former Bank Aspac director Hendrawan Haryono had misallocated Rp 583 billion (US$61.4 million) out of the Rp 1.5 trillion Government Liquidity Support Funds (BLBI) it had received from the central bank.

"We only approved the disbursement of the BLBI funds to help Bank Aspac settle its liquidity problems," Askadi, the central bank's deputy director of credit, told the South Jakarta District Court hearing.

He said that he wasn't aware of Bank Aspac's financial condition until he signed an approval for the BLBI funds disbursement proposal filed by the bank.

"I signed the approval after I had received a memorandum from the supervising department," he said.

He also said that he didn't know whether the disbursement had followed the correct procedures.

"It was beyond my authority. I naturally thought that the supervising department would know about this," he said.

Askadi, however, admitted that Bank Aspac deposited collateral worth Rp 488 billion to secure the disbursement of Rp 413 billion of BLBI funds in December 1998.

He said the collateral comprised of 534,535 square meters of land, including some buildings, in six locations across Bogor, some 60 kilometers south of Jakarta.

The official told presiding judge Muchtar Ritonga that he did not examine the physical condition of the collateral, but signed the approval for the funds disbursement.

"I just looked into the documents and entrusted the examination of the collateral's physical condition to the notary," he said.

He also said that he didn't appraise the bank's collateral, as such an appraisal was only ever made by the debtor.

"You didn't examine the physical condition, nor appraise the bank's collateral? This is an example why many banks' liquidity problems must be settled in courts," is how judge I.D.G. Putra Yadnya responded to Askadi's testimony.

Meanwhile, the central bank's deputy director for credit investigation, Petrus Puspo Sungkowo, told Thursday's hearing that he received a letter of authorization from the central bank's board of directors to supervise ailing banks.

Puspo, who testified after Askadi, said that he was one of three Bank Indonesia officials who signed the approval on Bank Aspac's proposal for the disbursement of BLBI funds. The other two were Askadi and Edi Budiman.

"Prior to approving the disbursement of BLBI funds, Bank Indonesia formed a special team to supervise the ailing banks," he said.

He said the team's main duty was to supervise the BLBI funds disbursement, so that it would not burden the state.

"After supervising several ailing banks, the team passed on recommendations to the board of directors. The board then held a meeting with all of the ailing banks," he said.

Puspo said Bank Aspac had received the discount facility in the form of promissory notes worth Rp 1.5 trillion, but said that he did not know whether Bank Aspac had met all the requirements.

Hendrawan, along with then Bank Aspac president Setiawan Harjono, was 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.

At a preliminary hearing, prosecutor Soetantyo said Hendrawan, 46, had violated Article 1 of Law No. 3/1971 on corruption, which carries a maximum sentence of life imprisonment.

However, Hendrawan reportedly allocated a portion of the money for foreign exchange trading and to finance the operations of some corporations affiliated with Bank Aspac.

Presiding judge Muchtar Ritonga adjourned the hearing until next Thursday, when the court will hear the lawyers' statement. (01)