Ex-bankers tried on US$16.5m graft charges

Muninggar Sri Saraswati, The Jakarta Post, Jakarta

Three former directors of a private bank were indicted on Wednesday for misusing Bank Indonesia liquidity support funds (BLBI), in the process inflicting a loss on the state of Rp 158 billion (US$16.5 million).

Defendants Handy Sunardio, Jemy Sutjiawan and Leo Andyanto, former directors of the now defunct PT South East Asia Bank (SEAB), are being tried in the West Jakarta District Court.

Chief prosecutor Godang Riadi S. charged the defendants with violating provisions of Law No.3/1971 on corruption as well as Law No.7/1992 on banking.

According to the indictment, Handy and Jemy had requested the central bank in 1996 to grant them a loan due to the bank's financial difficulties.

Bank Indonesia approved the request on Sept. 17, 1996, in order to save the bank from bankruptcy.

Instead of using the money to restore the bank's performance, the defendants allegedly used the money to the support a number of companies from the same group.

Bank Indonesia warned SEAB on Dec. 2, 1996 and Aug. 25, 1997, to halt the disbursement of liquidity support funds to the companies. However, the defendants ignored the warning and continued to channel the money to affiliated companies, the indictment charged.

Handy was detained by the police on Aug. 28, 1998 but was released on Sept.10, 1998.

On March 18 of this year, prosecutors detained him and two other defendants but the panel of judges, presided over by M. Saleh, released them under city arrest conditions last week.

Last month, the same court sentenced David Nusa Wijaya of Bank Umum Servitia to one year in jail for BLBI manipulation that cost the state Rp 1.27 trillion. The panel of judges, presided over by PA Sianipar, reasoned that the light sentence was necessary in order to give David a chance to work and raise the money as he had promised to repay it to the state.

The BLBI manipulation scandals have enraged many people here as they consider the legal system to have failed to mete out adequate punishment to the perpetrators.

The central bank rescued 48 troubled banks by providing Rp 144.5 trillion in liquidity support, but it has since been alleged that 95 percent of the support funds were misused.