Banking body exposes alleged corruption
Banking body exposes alleged corruption
JAKARTA (JP): A newly established watchdog organization, the
Center for Banking Crisis (CBC), released on Tuesday a 29-page
report detailing alleged corrupt and collusive practices by
central bank officials and bankers.
The report, titled the White Book, is the first of four
volumes which CDC says it will publish to demonstrate the extent
of central bank executives' involvement with bankers in the
granting of liquidity credits which condoned legal lending limit
violations.
"We possess solid proof, including documentation, to
substantiate this report," said CDC president A. Deni Daruri at a
media book launch.
Deni said his organization obtained some of the evidence from
central bank officials who were disgusted by corrupt practices
committed by some of their colleagues.
Amien Rais, chairman of the National Mandate Party (PAN) and a
presidential aspirant, was present at the book launch. He said
the report should prompt the government to act decisively in
following up allegations disclosed in the book.
"Now that various forms of malfeasance have been detailed in
this report, there is no longer any excuse for law enforcement
agencies not to act because of lack of evidence.
"If this report still fails to force the government to act, I
think there is a big conspiracy in the system to protect big
debtors, bad bankers and corrupt (officials)," Amien said.
The report alleges that Bank Indonesia as the lender of last
resort provided emergency liquidity support to several banks far
in excess of the value of their collateral.
"Many bankers used liquidity support from the central bank to
speculate on the rupiah, because the liquidity injection was made
at the same time as Bank Indonesia was selling dollars to defend
the rupiah," the report said.
CBC urged the government to prosecute Bank Indonesia officials
who, it alleged, had behaved corruptly and violated banking laws.
The report singled out several former managing directors of
the bank and several economic ministers as suspects who should be
investigated and brought to court for their involvement in
various banking scandals.
The report said most private national banks violated legal
lending limits (connected lendings), and several banks tried to
hide the breaches by setting up paper companies as loan
recipients.
The report cited instances of malpractice by Bank Aspac
(already closed), Bank Danamon (nationalized), Bank Dagang
Nasional Indonesia (closed) and Bank International Indonesia
(bailed out under the government-sponsored recapitalization
program).
Among the malfeasance cases detailed in the report were the
embezzlement of withholding income tax collected from negotiable
certificates of deposits, excessive provision of bank guarantees,
tax evasion and illegal derivative transactions.
The report listed the names of 77 paper companies used by a
private national bank as recipients of credit, which actually
went to companies owned or affiliated with the bank's controlling
shareholder. (02)