Ex-BI director sentenced to three years for graft

Ex-BI director sentenced to three years for graft

Tertiani ZB Simanjuntak, The Jakarta Post, Jakarta

After a trial lasting around one year, the Central Jakarta
District Court sentenced on Tuesday former Bank Indonesia (BI)
director Hendrobudiyanto to three years behind bars for abuse of
power in disbursing liquidity support funds totaling Rp 9.8
trillion (US$1.1 billion).

Still free, Hendro, the former director for bank supervision,
now 73 years old, refused to accept the verdict and said he would
file an appeal with the high court, even though the sentence was
more lenient than the six-years imprisonment sought by the
prosecution.

The panel of judges in the district court found Hendro guilty
of extending liquidity support loans to 18 indebted but
ineligible banks, including the now-defunct BDNI and Bank Modern,
in 1997 and 1998.

The judges found that Hendro had violated a presidential
instruction issued on Dec. 3, 1997, which ordered the central
bank to disburse the emergency funds only to healthy banks during
the financial crisis.

"The defendant abused his powers at the time the country was
suffering from the economic crisis, thus causing losses to the
state and burdening the state budget," Presiding Judge Panusunan
Harahap said when detailing the aspects that compounded Hendro's
crime.

As to the mitigating factors, the judges pointed to the loyal
service he had given as a civil servant for 44 years, his service
as a legislator, and his advanced age.

Having considered these factors, the judges reduced the three
years of imprisonment by the length of time he had been detained
to date, and ordered him to pay Rp 20 million in fines or spend
another two months in jail.

The judges did not require him to repay the losses that had
been inflicted, as demanded by prosecutors, "because the
facilities received by the banks were not in cash, but rather
disbursed automatically through the bank clearing system. There
is no proof that the defendant benefited from these facilities."

The court also ordered the prosecutors to return his three
cars and private bank account books seized earlier as evidence.

Hendro argued that he was not guilty because the measures he
and his colleagues took were designed to deal with the runs on
the banks that were taking place at the time, and that it was the
central bank's function to save depositors' funds.

A total of Rp 138.4 trillion, or 90 percent of the support
funds extended to 48 ailing banks during the crisis, were misused
by the bankers. Many of them have been brought to trial but most
have been acquitted or received lenient punishments even though
the state funds had never been recovered.

Besides Hendro, other suspects in the case included former
Bank Indonesia directors Heru Supraptomo and Paul Sutopo. They
will face the closing sessions of their trials in the Central
Jakarta District Court on April 3 and 4 respectively.