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)