Former BNI director detained over scam

Former BNI director detained over scam

Eva C. Komandjaja, The Jakarta Post, Jakarta

Former compliance director of Bank Negara Indonesia (BNI)
Mohammad Arsjad was officially detained on Wednesday at the
National Police Headquarters for his alleged role in a high-
profile lending scam in 2003.

Police investigator Sr. Comr. Benny Mamoto said that he signed
the arrest warrant on Wednesday afternoon, and the police made
the arrest at a five-star hotel here.

Benny refused to provide further details about Arsjad's case.

The BNI case centered on the issuance of fictitious letters of
credit by the state-controlled bank's Kebayoran Baru branch, in
South Jakarta, causing the state to suffer some Rp 1.7 trillion
(US$170 million) in financial losses.

The loan scam was made possible due to collusion between
certain bank officials and a number of businessmen linked to a
company called PT Gramarindo.

Businessman Adrian Waworuntu has been sentenced to life in
prison by the South Jakarta District Court for his key role in
the scam.

But that was after being allowed to flee the country after he
was named a suspect, allegedly due to police assistance.

Former head of the investigative team assigned to the case
Brig. Gen. Samuel Ismoko and his subordinate Sr. Comr. Irman
Santosa both have been detained for receiving bribes from Adrian.

Irman previously testified that two police generals, former
police chief Gen. Da'i Bachtiar and former chief of detectives
Comr. Gen. Erwin Mappaseng received bribes from Arsjad.

The bribes were apparently intended to influence the senior
officers to halt the investigation into the bank fraud.

However, so far the police have not publicly announced if
there is concrete evidence of the two generals' involvement in
the case.

Arsjad's lawyer T. Nasrullah said that his client was arrested
because of his failure to report the graft in the first place.