Bapepam considers criminal charges in Bank Lippo case
Zakki Hakim, The Jakarta Post, Jakarta
The Capital Market Supervisory Agency (Bapepam) is considering filing criminal charges against alleged wrongdoers in the Bank Lippo scam.
"Bapepam has agreed that in addition to administrative sanctions, there will be criminal charges as well," Teten Masduki of Indonesian Corruption Watch told reporters on Tuesday following a closed door meeting with Bapepam chairman Herwidayatmo.
Teten is a member of the Public Coalition on the Bank Lippo Scam, an informal grouping that has been leading a campaign to ensure that those involved in the Bank Lippo affair are punished appropriately.
The grouping met Bapepam to get an update on the agency's investigations to date.
Teten said that the capital market watchdog would announce its official stance on whether to press charges after it had concluded its investigation into the case on March 17.
Previous Bapepam statements in the mass media, however, indicated that the agency would only impose administrative sanctions against the management of Bank Lippo.
A statement by Herwidayatmo that the Bank Lippo case had yet to cause financial losses to the state was seen by analysts as an indication that Bapepam would eventually let the bank's top executives and commissioners get off scot-free.
The Bank Lippo saga started when the bank published two different third quarter financial reports late last year. While in the first report in November the bank claimed to have made a profit, the second report in December showed that the bank was in the red and its capital adequacy ratio (CAR) had plunged to the alarming level of 4 percent.
The Jakarta Stock Exchange has faulted the publicly-listed bank's management for the dual financial reports, particularly as the bank had initially claimed that the first report was audited, which turned out not to be true, with the result that the investing public had been mislead.
The bank has claimed that the financial loss and capital deterioration were caused by a plunge in the value of foreclosed assets (mostly property assets). This argument was challenged by analysts as the prices of houses and other property assets were on the rise at the time.
Since late last year, the price of the bank's shares have tumbled. There has been allegations that certain parties linked to the former owners of Bank Lippo had been deliberately manipulating transactions to lower the bank's share price, with the main intention being to allow the former owners to repurchase the bank's shares from the government at a very low price.
This would cause great losses to the government, which injected bailout funds into the bank in 1999. The government now owns a 59 percent stake in Bank Lippo.
Alexander Lay, a member of the Public Coalition on the Bank Lippo Scam, said that according to article 107 of Law No. 8/1995, a deliberate attempt to mislead the investing public and other parties, including Bapepam, could be punished with a maximum of three years imprisonment and a fine of up to Rp 5 billion (US$563 thousand)