Bapindo would have collapsed: BI official

JAKARTA (JP): The huge financial losses incurred by Bapindo from its transactions with Eddy Tansil destroyed the state-owned bank -- or would have, according to a bank executive, if it hadn't been for a government bail out.

Antony M.T. Siregar, supervisor of state banks at Bank Indonesia, told a court hearing trying the case of Tansil, yesterday, that the government injected fresh money to cover the huge losses resulting from a series of non-performing loans extended to Tansil's Golden Key Group.

"If the government had not come to the aid of (Bapindo), it would certainly have collapsed. If that had happened, it would have disrupted the government's development programs," Antony told the hearing at the Central Jakarta District Court.

When asked how much money the government injected to Bapindo, Siregar declined to give any detailed figures, saying he did not know the exact number. "I don't know exactly, but it must have covered the loses," he said.

Earlier court testimony suggested that Bapindo's losses amount to over Rp 1.05 trillion ($490 million), including interest earnings and discounts offered on bankers acceptances.

Siregar said he was involved in the central bank investigation of how Bapindo could have extended the loans to Tansil without going through routine scrutiny.

The investigation found that Bapindo had been careless, he said. "Bapindo began to disburse the loans although Tansil had not yet signed a credit agreement," he said. "You couldn't call it credit. It was an abnormal facility."

Dariyanto H.K. of the BPKP, the government audit agency, gave testimony that Bapindo has already had to honor some $338 million worth of banker's acceptances issued by Tansil and some $104 million more that will mature in August.

Dariyanto said a large sum of the money extended to Tansil could not be traced since it had gone into various bank accounts or used for his private interests. Some had also been transferred to the accounts of Tansil's relatives, he said.

Rus Handoko of BDN, another state bank, said his bank pulled out of a loan syndication for Tansil because of indications of irregularities in the way the loans had been disbursed. (11)