BI chief convicted

BI chief convicted

Muninggar Sri Saraswati, The Jakarta Post, Jakarta

After 14 months of prolonged trials, Governor of Bank
Indonesia Sjahril Sabirin was finally sentenced to three years in
jail on Wednesday for his involvement in the disbursement of Rp
904 billion (US$90.4 million) of Indonesian Bank Restructuring
Agency (IBRA) funds to privately run Bank Bali in 1999.

Central Jakarta District Court also fined the defendant Rp 15
million or a further three months in jail.

When hearing the verdict, Sjahril was clearly shocked, as were
the other two defendants -- businessman and director to factoring
firm PT EGP Djoko S. Tjandra and former IBRA deputy chairman
Pande N. Lubis -- who were acquitted of all charges related to
the scandal in August and November 2000 respectively. He
expressed optimism last week that the judges would release him
from the corruption charge.

"I'm very disappointed with the verdict. I could have resigned
a long time ago but I didn't," said Sjahril, who was accompanied
by a team of lawyers led by Muhammad Assegaf.

Sjahril, who looked exhausted during the eight-and-a-half-hour
hearing, said he was considered launching an appeal, so the legal
process was not yet over.

Chief prosecutor Y.W. Mere greeted the ruling.

"I'm glad we have been able to fulfill public expectations and
a sense of justice," he told reporters after the hearing.

Unlike Djoko and Pande, who were previously charged with
violating contracts, Mere charged Sjahril with violating the
prudential banking principle.

Mere had recommended the court sentence Sjahril to four years
in jail. The 59-year-old defendant was accused of violating
Article 1 of the 1971 Law on corruption, prohibiting the
enrichment of oneself or others at the expense of the state.

"Defendant Sjahril Sabirin has been proven guilty of
committing corruption that has caused financial losses to the
state," said chief judge Subardi. The court was crowded with
journalists and Bank Indonesia employees, including senior deputy
governor Anwar Nasution and former governor Radius Prawiro.

The 210-page verdict, which was read in turn by judges Asep
Irwan Iriawan and Ali Akmal Haky, said the defendant had violated
the prudential banking principle, which requires bankers to
follow procedures in banking activities.

The disbursement of the Bank Bali claim took place at around 8
p.m. on June 1, 1999 through state account No. 502.000.002 just
nine hours after Bank Indonesia received a letter from the
Ministry of Finance ordering the central bank to disburse money
to the private bank through the account.

The letter ordered the central bank to open the account to
enable the government to disburse money to troubled banks.

Sjahril had already approved Bank Bali's claim before
obtaining the letter. His approval came after receiving a
document from IBRA, which was signed by deputy chairman Farid
Haryanto. The document verified that Bank Bali was eligible to
obtain the claim and asked the central bank to pay the credit.

Based on the state's credit disbursement procedure, a request
to pay credit must be signed by the chairman of any institution
authorized to request credit disbursement, such as IBRA.

"The defendant must have been aware that the letter of request
did not have the signature of IBRA chairman Glenn M. Yusuf.
Instead, it was only signed by the deputy alone," Asep said,
adding that Glenn had been off since May 18, 1999.

The Bank Bali scandal drew public attention after banking
expert Pradjoto told the media on Aug. 1, 1999, that the
disbursement of Rp 904 billion to Bank Bali was thanks to the
help of PT Era Giat Prima (PT EGP). The company, owned by Golkar
legislator Setya Novanto, accepted Rp 546 billion of the Rp 904
billion of Bank Bali's claim.

Sjahril's indictment stated that Bank Bali's claim was paid by
Bank Indonesia after he attended a meeting at Hotel Mulia in
Senayan, Central Jakarta, on Feb. 12, 1999 with former Bank Bali
director Rudy Ramli, former minister of investment and state
enterprises development Tanri Abeng, Novanto, businessmen Firman
Soetjahja and Irvan Gunardwi and former supreme advisory council
chairman A.A. Baramuli.

Many believe the money was intended to finance the reelection
of then president B.J. Habibie, who eventually lost his post in
October 1999.

Bank Indonesia disbursed money from the state to reimburse
Bank Bali's loan to three defunct private banks -- Bank BDNI,
Bank Tiara and Bank Umum Nasional. The three banks were
liquidated during the economic crisis in 1997.

Sjahril was declared a suspect in the scandal in June 2000 and
was last year detained for over five months. He refused to step
down from his position.