BI audit unlikely, says former director

BI audit unlikely, says former director

JAKARTA (JP): The International Monetary Fund's demand that
international accounting firm PricewaterhouseCooper be allowed to
audit the central bank to resolve the Bank Bali scandal faces a
"procedural" difficulty, according to an expert.

Former Bank Indonesia director I Nyoman Moena said on Sunday
that the new independent central bank law stipulates that Bank
Indonesia can only be audited by the Supreme Audit Agency (BPK).

"The government cannot order an audit into Bank Indonesia," he
told the Jakarta Post.

Moena explained that PricewaterhouseCooper could only audit
the central bank "if BPK feels it can't do it alone".

The House of Representatives could ask BPK to include the
international auditor in its audit process, he added.

"The call to widen the audit into Bank Indonesia is good but
it faces a procedural problem," he said.

"The IMF has called the wrong number," he added.

IMF first deputy managing director Stanley Fischer said in an
Aug. 17 letter to Coordinating Minister for Economy, Finance and
Industry Ginandjar Kartasasmita that PricewaterhouseCooper should
not limit its audit solely to the Indonesian Bank Restructuring
Agency (IBRA), but should include Bank Indonesia to gain all
relevant facts "necessary to answer the questions that are of
serious concern to the government, the public and us."

"It is of critical importance that the audit's scope be
widened to include Bank Indonesia, which has been in charge of
supervising Bank Bali. In particular, BI's handling of the
initial claim, as well as BI's internal investigation of where
the money went, need to be independently reviewed," according to
a copy of the letter obtained by the Post on Friday.

The Bank Bali scandal, in which Rp 546 billion (US$75 million)
was quietly transferred out of the bank in June to PT Era Giat
Prima, a private firm linked to the ruling Golkar Party, has put
the rupiah and the stock market under pressure and shaken those
in the country's political elite allegedly involved in the scam.

Legal banking expert Pradjoto revealed to the press in July
that the transfer was payment for EGP's services in securing the
return of the bank's interbank claims on closed down Bank BDNI.

EGP is a company owned by businessmen Joko Chandra and Setya
Novanto, who are affiliated with Golkar.

Officials said Bank Bali should not have used any third party
because the interbank claims are guaranteed by IBRA through the
government's blanket guarantee scheme.

Former Bank Bali president Rudy Ramli, one of several suspects
under police investigation, reportedly told police interrogators
last week that several top government officials and people close
to President B.J. Habibie may have been involved in the deal.

According to a transcript of the police questioning leaked to
the media, Rudy named Finance Minister Bambang Subianto, Bank
Indonesia Governor Sjahril Sabirin, State Minister of the
Empowerment of State Enterprises Tanri Abeng, head of the Supreme
Advisory Council (DPA) A.A. Baramuli, President B.J. Habibie's
younger brother Suyatim "Timmy" Habibie, IBRA deputy chairman
Pande Lubis and five top businessmen as being involved in the
case.

The Indonesian Democratic Party of Struggle (PDI Perjuangan)
has also accused Habibie's brother and several high-ranking
government officials of being involved.

Kontan weekly said in its Friday issue that the money
transferred to EGP was supposed to be used to help finance
efforts to ensure Habibie's reelection.

Sjahril told a hearing with the House of Representatives'
Commission VIII on finance and banking that the Rp 546 billion
commission fee had been fully returned to Bank Bali.

But legislators were not satisfied, saying that returning the
money was not enough because a crime had been committed in the
Bank Bali deal.

Legislators pushed the country's top banking authorities to
admit the involvement of "powerful" people in the Bank Bali case
and to reveal their names.

But Bambang, Sjahril and IBRA chairman Glenn S. Yusuf said
they could not answer those questions given that the
investigation had yet to be completed.

Bambang said the government has appointed
PricewaterhouseCooper to validate IBRA's internal audit on the
case.

"The audit will be completed in two weeks," Bambang said,
adding that the result would be handed over to National Police
and the attorney general for legal measures to be taken.

But the legislature was not satisfied with the response,
prompting the ruling Golkar faction to issue a statement on
Friday urging Habibie to dismiss Bambang and Glenn.

Many legislators have said that an independent audit on BI was
crucial because tracing the flow of the Bank Bali funds would
reveal the "powerful" people involved in the deal.

The IMF said in the letter the audit on BI should include the
tracing of funds, "from the time they were paid out from Bank
Bali to the time when they were returned to the bank" should this
occur. (rei)