City Police to probe fraud at HongkongBank

City Police to probe fraud at HongkongBank

JAKARTA (JP): The City Police has assigned a number of senior
detectives to investigate a massive fraud at the branch office of
HongkongBank here.

The police said yesterday that it will also cooperate with
Interpol in other Asian countries to probe the fraud, which might
involve international crime syndicates.

Sources at the police office here said the police had arrested
a man identified as HW for his alleged role in the fraud, which
involved funds of around Rp 100 billion (US$45 million).

The sources said HW had managed to withdraw the money from
Bank Modern, one of three banks through which the HongkongBank
transferred the funds.

The man was arrested when he was withdrawing the money in the
second bank, the sources, who refused to be identified, told The
Jakarta Post.

The third bank still holds the fund.

However, the alleged key figure in the fraud is identified as
Hdr, a holder of a Philippine passport, the sources said.

City Police spokesman Lt. Col. Iman Haryatna refused to
comment on the arrest.

"For the time being, I have nothing to say to the press," Iman
said when he was asked for confirmation. "We hope the press
people will understand if we don't give any detailed information
at this stage," he added.

Leila Djafaar, the HongkongBank's public relations manager,
said yesterday that the fraud occurred early this month.

"Our supervisory section discovered a fraud at our main branch
in Jakarta. And we have reported the case to the authority,"
Leila told the Post.

She said that the fraud is still under investigation of both
Bank Indonesia, the central bank, and the police.

Senior executives of the central bank, however, refused to
make any comments on the fraud.

"The executives are too busy to make any comment on the
HongkongBank case," a Bank Indonesia official told journalists,
who had been waiting for hours to get explanation from the
central bank officials.

Leila did not disclose the total of the funds involved in the
fraud. But the police said that it may reach over Rp 97 billion
(US$44 million).

According to earlier reports, the fraud occurred on Jan. 5
through a fake transaction, which ordered the HongkongBank to
transfer nearly Rp 100 billion to three private banks in Jakarta.

Leila ensured that the fraud will not cause a significant
impact on the HongkongBank, saying that the bank remains in sound
condition.

HongkongBank, a subsidiary of the Hongkong and Shanghai
Banking corporation Ltd, started operations in Jakarta in 1864.
Currently it has five branches outside Jakarta -- in Surabaya,
East Java, in Bandung, West Java, in Semarang, Central Java, in
Medan, North Sumatra, and Batam, Riau.

As of last June, HongkongBank Indonesia booked total assets of
Rp 2.05 trillion (US$893 million at current rate), up from Rp 1.4
trillion in June 1994. (rid/hen/bsr)