Former banker tried for corruption
Damar Harsanto, The Jakarta Post, Jakarta
The South Jakarta District Court began on Thursday the trial of former president director of the now-defunct PT Bank Aspac, Setiawan Harjono, who is charged with corruption for allegedly misusing money from Bank Indonesia Liquidity Support (BLBI) funds.
Prosecutor Hermut Achmadi told the court that the defendant misappropriated the funds that his bank received in 1997 and 1998, to enrich himself and his company, causing the state to suffer Rp 583.4 billion (about US$56 million) in losses.
"The defendant, as the president director of PT Bank Aspac, had failed to manage the bank operations in accordance with prudential banking principles and other guidelines provided by the central bank to management," Hermut stated as he read the 26- page indictment.
Hermut said the defendant, who is under house arrest, violated Article 1 paragraph 1a of Anticorruption Law No. 3/1971, which carries a maximum punishment of life imprisonment.
Setiawan is one of the few bankers who are on trial for similar BLBI-related charges.
The first banker tried for the charges, Hendrawan, however, was acquitted for corruption, but sentenced to one year in jail and was ordered to pay a Rp 500 million fine or serve another three months imprisonment for the lesser charge of violating banking laws.
Hermut said Setiawan, 56, along with his relative Hendrawan Harjono, who served as deputy president director, had allegedly taken advantage of their positions as the bank's top executives, to misuse the bailout funds allocated to them by siphoning it off for personal investments.
According to the central bank's ruling, the money was intended to help the banks contain the losses due to massive runs on the bank amid the economic crisis which struck the country in 1997.
The central bank had extended a total of Rp 144.5 trillion to banks under the BLBI program between 1997 and 1999.
Audit reports by the Supreme Audit Agency revealed that some 95 percent of the Rp 144.5 trillion was misused by the banks.
Instead of using the funds to reimburse depositors, many banks used the money for other purposes including foreign exchange speculation, lending to affiliated business groups and for repaying subordinate loans.