Global's auditors may lose licenses over suspected accounting cover-ups
Rendi A. Witular, The Jakarta Post/Jakarta
The government may revoke the operating license of accounting firms that audited the financial accounts of troubled Bank Global Internasional if they are proven to have committed irregularities in the process.
Director general of financial institutions Darmin Nasution said an investigation into auditor Joseph Susilo Accountant was under way, over allegations that the office had covered up irregularities in Gobal's 2003 financial account.
"The auditor passed Bank Global's financial accounts, despite the existence of fictitious securities in the bank since last year.
"We may revoke its license if (the auditor) is proven to have been has involved in the crime," Darmin said.
In its "unqualified" positive opinion of Bank Global's 2003 financial report, auditor Joseph Susilo found no irregularities in the account and said all figures presented in the report were accurate.
The accounting firm has been investigated by the Directorate General of Financial Institutions since September, Darmin said. The result of the inspection and the possible punishment would be make public in mid-January, he said.
BI temporarily suspended the ailing Bank Global's operations earlier this month for 30 days after alleged fictitious lending activities and other banking fraud came to light.
Bank Global's capital adequacy ratio (CAR) has dropped into negative territory, and its management has been accused of forging securities certificates and other commercial papers to increase its CAR.
The CAR measures the financial health of a bank, and must be at a minimum level of 8 percent.
Darmin said the directorate might also investigate Thomas, Trisno, the Hendang & Partners accounting firm, which audited Bank Global's 2002 financial account. If the firm was proved to have been involved it would also lose its operating license.
Over the years, the directorate has a record of handing down tough punishments to errant auditors. In August, it revoked the license of an accountant that audited the now-defunct Bank Asiatic and imposed a one-year suspension on the license of a Bank Dagang Bali accountant.
The in-debt banks were closed in May after illegal transactions involving bad loans worth Rp 1.2 trillion (US$133 million) were discovered.
In the Bank Global case, the government is also investigating five securities houses over allegations they were involved in making false statements to the central bank over the amount of securities papers owned by the publicly listed bank.
Several reports said the five firms currently being probed by the Capital Market Supervisory Agency (Bapepam) are PT Aldiracita Corpotama, PT Interasia Securitindo, PT Madah Pacific, PT Unisecurindo Abadi and PT Makefin Sekuritas.
The police have arrested 11 Bank Global employees for trying destroy documents related to the case.