Government declines to disclose audit result on bank scandal
Government declines to disclose audit result on bank scandal
JAKARTA (JP): Coordinating Minister for Economy, Finance and
Industry Ginandjar Kartasasmita said on Monday that the
PricewaterhouseCoopers (PwC) audit result on the Bank Bali
scandal could not be disclosed to the public because of a banking
secrecy law.
"As a coordinating minister, I've spoken with the Supreme
Audit Agency (BPK) on the matter," he told reporters following a
meeting with economic ministers.
Ginandjar said that BPK sent a letter to the International
Monetary Fund (IMF) to explain the situation.
"But until now, I don't know what their response is," he
added.
The IMF has repeatedly asked the government to publicly
disclose the complete version of the PwC audit result by handing
it over to the Independent Review Committee, which is chaired by
Mar'ie Muhammad. The fund has decided to delay the review of the
country's economic program initially scheduled for the middle of
this month, which also automatically delays the aid disbursement
for Indonesia.
IMF said it would resume aid disbursement if there was a clear
sign of a satisfactory resolution to the Bank Bali scandal. The
World Bank has also made a similar threat.
Ginandjar said that the Bank Bali scandal has caused a
"temporary" setback to the country's economic development as seen
from the rupiah weakening from slightly above Rp 6,000 to the
U.S. dollar before the scandal emerged to a current level of
about Rp 8,000.
He said that the scandal had caused ministers to lose valuable
time and delay several government projects.
PwC was asked in August by BPK to audit Bank Indonesia in
relation to the Bank Bali scandal. The audit report was completed
on Sept. 8. But at the request of BPK, PwC made two audit
reports: a short form and long form.
The condensed report, which was basically a summary, was
disclosed to banking authorities and the House of Representatives
and was widely circulated among journalists.
But the full report, which contains the flow of funds in the
Bank Bali scandal, was only given to the police.
The IMF and a House special investigation team have demanded
the disclosure of the full report to reveal the influential
people involved in the scandal.
BPK has insisted that the full report can only be given to the
police and attorney general according to an existing banking
secrecy law and Law No. 5/1973 on BPK, which stipulates that any
BPK audit result indicating a crime must only be submitted to the
two institutions.
BPK chief Satrio B. Yudono said that violators of the BPK law
risk a six-year jail term.
The Bank Bali scandal revolves around a payment of Rp 546
billion by the bank to politically connected PT Era Giat Prima
(EGP) as a commission fee to help the bank recoup Rp 904 billion
in interbank loans on a closed bank.
Bank Bali was not supposed to use the services of EGP because
the interbank loans were guaranteed by the Indonesian Bank
Restructuring Agency (IBRA) under the government blanket
guarantee program.
There have been allegations that EGP was used by the inner
circle of President B.J. Habibie to help raise money for
political purposes ahead of the upcoming November presidential
election.
PwC said in its summary report: "Despite limited access to
information and a limited two-week time frame, PwC has uncovered
numerous indicators of fraud, noncompliance, irregularity,
misappropriation, undue preferential treatment, concealment,
bribery and corruption during the process and payment of the Bank
Bali claims."
"PwC recommends that an additional investigation be conducted
regarding the potential involvement of numerous individuals and
companies in circumstances surrounding the Bank Bali matter.
"These individuals include ministers, senior government
officials, members of the legislature, political party officials
and prominent members of the business community," PwC added.
The international auditor also said that it was forbidden by
the central bank to probe into certain personal bank accounts due
to the banking secrecy code.
"PwC recommends that the fund tracing exercise be completed to
fully understand what has happened."
In a related development, law expert Loeby Loekman said on
Monday that Bank Indonesia should be provided with an exception
to breach the banking secrecy code in light of the "public
interest" to disclose the personal bank accounts of the
influential people allegedly involved in the Bank Bali scandal.
"There must be an exception if there's clear and present
danger," he said at a discussion on banking secrecy codes at the
central bank headquarters.
Loeby, however, said that there could be a long debate on the
definition of "public interest".
Another law expert, Marjono Reksodiputro, urged Bank Indonesia
to ask the Supreme Court for guidance on this matter, which could
be followed by the lower court.
"But under the Indonesian civil law system, the lower court
could always deviate from the guidance of the Supreme Court,"
said law expert Sutan Remy Sjahdeni. (rei)