BI directors order transfer of funds: Witness

JAKARTA (JP): Former Bank Indonesia chief of accounts Desmi Demas told a district court on Wednesday that he transferred Rp 904 billion of funds from the state treasury's account to Bank Bali upon request of BI's board of directors hours before a bank restructuring agency official approached him.

Speaking before a panel of judges at North Jakarta District Court, Desmi said that such a transfer, from the state treasury, belonging to the finance minister, to a private bank like Bank Bali was very rare.

"I admit that such a transfer rarely happens in the banking world. In fact, it might never have happened before," Desmi told the court, which is hearing the case against Bank Indonesia Governor Sjahril Sabirin.

Sjahril is being tried for allegedly ordering one of his directors, Erman Munzir, sometime between February 1999 and June 1999, to disburse the money to Bank Bali.

Desmi said that former finance minister Bambang Subianto, the owner of the state treasury account at Bank Indonesia, ordered BI's board of directors (now board of governors) to process the transfer.

The board of directors then ordered Desmi to transfer the money from the state treasury account to Bank Bali on June 1, 1999.

When asked by presiding judge Soebardi whether the finance minister had ever objected to the transfer, Desmi said: "No, never."

Desmi's testimony differed from an earlier testimony given by a former deputy chairman of the Indonesian Bank Restructuring Agency (IBRA), Pande Nasorahona Lubis, who claimed that he ordered the central bank to disburse Rp 904 billion of IBRA's funds to Bank Bali.

Desmi contended that the central bank's board of directors had ordered him to transfer the funds from the state treasury to Bank Bali and he did it several hours before Pande Lubis came to hand him the letter ordering the central bank to disburse Rp 904 billion of IBRA's funds to Bank Bali.

"I was asked (by Bank Indonesia's board of directors) to transfer the money at about 1 p.m., I met Pak Pande later, at about 6 p.m. as he brought the letters with him.

When prosecutor Jan Merre asked him why the central bank had transferred the money before IBRA had asked for it, Desmi replied that he was just following orders given by the central bank's board of directors.

The Bank Bali corruption scandal centers on the repayment of loans extended by Bank Bali to three defunct private banks -- Bank BDNI, Bank Tiara, and Bank Umum Nasional. The government took over the third party liabilities of closed banks at the time.

In his earlier testimony, Bambang Subianto said that he had never approved the payment of Bank Bali's claim because it did not fulfill the requirements stipulated in the joint agreement between IBRA and Bank Indonesia's board of directors.

Wednesday's trial had planned to hear the testimony of former IBRA chairman Glen Yusuf, but he failed to appear before the court due to poor health.

Judge Soebardi adjourned the trial until July 11 to hear other witnesses. (tso)