Sat, 17 Sep 1994

Bapindo's weaknesses revealed in Court

JAKARTA (JP): Court testimony by two senior Bapindo executives revealed weaknesses in the way crucial decisions were made and reviewed by the directors of the government-owned bank in 1992 that led to the Rp 1.3 trillion ($620 million) debacle.

Achmad Marzuki and Suryanto, who served the directors at the time, said their bosses neglected some very basic procedures when they handled the loan account of Eddy Tansil, the owner of the Golden Key Group and the main culprit in the scandal.

The two men testified during the trial of Subekti Ismaun, who presided over the bank's board of directors in 1992, at the Central Jakarta Court on Thursday.

Their testimony focused on two board of directors meetings on June 2 and another on June 16.

Subekti and the other directors, at a meeting on the morning of June 2, agreed that the bank should cut its losses in its dealing with Tansil, then amounting to only $208 million. But a second meeting was held later that afternoon at which the directors agreed to continue lending to Tansil because of orders from then Minister of Finance J.B. Sumarlin. This position was endorsed at the June 16 meeting.

Suryanto, who served as the secretary at Bapindo's head office, said that on June 16 the directors simply endorsed the decision without debating or reviewing the case.

Suryanto said he was not aware of the existence of a second meeting on June 2 and that there was no record of the minutes of the proceeding. He recalled that even the first meeting was attended by only three of the five directors.

Achmad Marzuki, who was secretary of the board of directors at the time and is now acting president of Bapindo, also said that he was not aware of the afternoon meeting on June 2.

Four of the five members of the board are now being tried for allowing the debacle to occur. The other three directors on trial are Sjahrizal, Towil Heryoto and Bambang Kuntjoro.

The four defendants are building their defense around the presence of the afternoon meeting on June 2, stressing that Minister Sumarlin overruled their morning decision to stop lending to Tansil and ordered that the loans be continued.

Sumarlin has denied giving such an order, pointing out that on that date he was out of town.

The testimony by Achmad and Suryanto prompted presiding Judge Soedjatman to wonder aloud about the existence of the second meeting on June 2. "It seems that there was an invisible meeting," he said to laughter in the public gallery.

Achmad also pointed out yesterday that the directors hastily approved the loans to Tansil, sacrificing basic procedures in scrutinizing his loan applications. They did this because they were trying to help Tansil beat a deadline to win a project.

The directors had earlier said that the loans were approved in 1989 because of pressures from Sudomo, then the coordinating minister of security and political affairs.

Tansil has already been convicted and sentenced to 17 years imprisonment and ordered to pay Rp 500 billion ($238 million) in restitution.

Meanwhile, Riswanto Hadi, head of the bank's projects evaluation team, testified that the directors also relied entirely on Golden Key Groups' feasibility study in approving the loans.

There were no on-site evaluations by the bank, Riswanto said.

He said he even proposed to travel to South Korea to inspect the specifications of the machinery which Tansil was planning to buy. "But Towil rejected the proposal," he attested. (02)