BPK wants BI, IBRA to return $2.5 billion

BPK wants BI, IBRA to return $2.5 billion

Rendi A. Witular, The Jakarta Post, Jakarta

The Supreme Audit Agency (BPK) demanded that Bank Indonesia
and the Indonesian Bank Restructuring Agency (IBRA) immediately
return government funds allegedly misused by the two institutions
or it would ask the Attorney General's Office (AGO) to launch an
investigation.

"If they (BI and IBRA) refuse to repay the money back we will
declare that there is a huge loss in the state funds resulting
from their actions. Thus, we will ask the AGO to probe the case,"
BPK deputy chairman Bambang Wahjudi told a press conference on
Friday.

Bambang did not set out any deadline for the central bank and
IBRA to return the money.

The funds were stashed into a government special account
(popularly called Account No. 502) at the central bank. The
funds, launched in the wake of the late 1990s banking crisis,
were used to cover all obligations of closed banks. The money,
meant to be a blanket guarantee program has been part of efforts
to revive confidence in the troubled banking industry.

But BPK announced last week that based on its audit, there had
been irregularities in the disbursement of some of the funds
amounting to Rp 20.9 trillion (US$2.52 billion). Bambang said
there was a violation of procedures in the disbursement of the
funds.

The report was the result of an investigation undertaken at
the request of the House of Representatives in mid-2001, after
most of the funds (about Rp 53.8 trillion) in the account had
been used.

The audit request was also made after the government decided
to set up a second account worth about Rp 40 trillion for the
same purpose. The new account is now known as Account No. 509.

Banking analyst Pradjoto urged BPK to immediately report the
case to the AGO without having to wait for the two institutions
to return the money because a violation of procedures was an act
of corruption.

Calling the complaints from the central bank over the BPK
findings "biased," Bambang said that during and after the
investigation the agency had several times reconfirmed and
explained all the findings to the respective officials.

"I do not know why the central bank wanted us to review it. It
is already cleared because in the audit report we have addressed
their concerns," said Bambang.

BPK's chairman Satrio B. Joedono reaffirmed Bambang's
statement during the briefing, saying that the agency would stick
to its audit result and challenge any party to confront the
matter in front of the House of Representatives.

Central bank Governor Burhanuddin Abdullah said earlier that
there were no irregularities in the use of funds in the "502"
account and called the report "biased".

Burhanuddin also called for a meeting with BPK and the House
to deal with the matter.