Court to issue legal opinion on PwC report

Court to issue legal opinion on PwC report

JAKARTA (JP): The Supreme Court will issue a legal opinion on
whether the Supreme Audit Agency (BPK) should disclose the full
report of the PricewaterhouseCoopers (PwC) audit of the
transactions relating to the Bank Bali scandal, a government
source said.

"The justices are now meeting to decide their opinion on
whether BPK should be allowed to fully disclose PwC's audit of
Bank Bali to the House of Representatives," the source told The
Jakarta Post.

He said BPK asked the Supreme Court to issue a legal opinion
on whether the agency should submit the PwC audit report to the
House of Representatives despite the banking secrecy code and
BPK's internal rules.

The meeting of the Supreme Court was attended by Chief Justice
Sarwata, Senior Deputy Justice Ketut Suraputra and six deputy
justices -- Yahya Harahap, Soeharto, German Hoediarto, Taufik,
Syafiuddin Kartasasmita and Zakir.

Such legal opinions, known as fatwa, are issued by the
Supreme Court to help parties settle differences in the
interpretation of laws.

The source said the legal opinion would be submitted to BPK on
Tuesday or Wednesday.

The agency hired PwC in late August to audit the transactions
relating to the high-profile Bank Bali scandal, which allegedly
involved associates of President B.J. Habibie.

However, the agency only disclosed an abbreviated version of
the firm's audit report, refusing to release the full document.

This has raised speculation that BPK is aiding the government
in covering up the scandal, which involves the transfer of Rp 546
billion (about US$80 million) from Bank Bali to PT Era Giat Prima
(EGP) as a commission for helping the bank recoup Rp 904 billion
in interbank loans to closed banks. EGP is run by two businessmen
connected to the Golkar Party, which has made Habibie its
presidential candidate.

Bank Bali should not have used the services of EGP because the
interbank loans were covered by the government's blanket
guarantee program.

There have been allegations that the inner circle of President
Habibie was using EGP to raise money to finance Habibie's
presidential candidacy.

BPK said it could only disclose the complete PwC audit report
to the police and the Attorney General's Office, because to do
otherwise would breach the banking law, particularly the banking
secrecy code.

"A violation of the law would cause both BPK and PwC to risk a
fine of up to $25 million and a four-year jail term," BPK chief
Satrio B. Yudono said.

He also said in cases of criminal wrongdoing, an audit report
must only be submitted to the police, the Attorney General's
Office and the tax office in cases of tax fraud.

Some House members have raised the possibility of a special
vote to force BPK to disclose the complete PwC audit report.

As the case drags on, the International Monetary Fund has put
its bailout package for Indonesia on hold, saying it will
disburse the funds only when the scandal has been satisfactorily
resolved by the government.

Police questioned on Monday Minister of Finance Bambang
Subianto and State Minister for Empowerment of State Enterprises
Tanri Abeng over the Bank Bali scandal, which has engulfed
embattled president ahead of an Oct.20 presidential election.

After questioning, both ministers said separately that they
were being summoned as witnesses into the case. (udi)