House to decide on PwC report

JAKARTA (JP): The House of Representatives (DPR) appointed its legal and banking commissions to decide whether to publish the full PricewaterhouseCoopers (PwC) report on its audit of the transactions relating to the Bank Bali scandal.

House Speaker Akbar Tandjung said the two commissions would thoroughly study the PwC audit report and debate the legal and political implications of fully disclosing the report, which is believed to implicate a number of influential businesspeople, senior government officials and politicians.

"The commissions will submit their recommendations and the DPR leadership will then make a decision," Akbar said during a media conference following a meeting of House faction leaders.

Akbar said all of the faction leaders agreed that the Bank Bali case should be handled in a transparent manner as demanded by the people.

However, Akbar said a number of legislators opposed the disclosure of the full audit report, while others maintained disclosing the PwC report would not necessarily violate the banking secrecy code because it was in the public's interest.

"These disparate views developed during the meeting," he said.

The Bank Bali scandal centers on the dubious transfer of some Rp 546 billion (around US$80 million) from the bank to a private firm owned by businessmen linked to former president B.J. Habibie's Golkar Party.

Asked about the case's impact on Golkar, party chairman Akbar said Golkar was ready to provide clarifications to the commissions.

The PwC report also alleges that Rp 15 billion of the money involved in the scandal was transferred directly to the Golkar team in charge of Habibie's election campaign.

Many observers point to the Bank Bali case as one of the main factors behind Habibie's failed presidential bid.

The Habibie administration declined to publish the full PwC audit report despite pressure from the public, the previous House and the International Monetary Fund.

The IMF, the World Bank and several other major creditors have suspended loan disbursements to the country until the government satisfactorily resolves the Bank Bali case, including disclosing the complete PwC audit report.

The Habibie administration argued that disclosing the full audit report would violate the country's banking secrecy code, because the report contained information on private bank accounts.

Days before the Oct. 20 presidential election, the Supreme Court issued a legal opinion supporting the release of the PwC report to the House. The Supreme Audit Agency handed over a copy of the full report to the House last week.

The previous House, which ended its term last month, completed an investigation of the Bank Bali scandal and alleged that several senior government officials were directly or indirectly involved in the affair.

Meanwhile, Bank Indonesia Governor Sjahril Sabirin said on Monday he would support the disclosure of the complete PwC audit report.

"We don't have any problems with that," he said following a meeting with President Abdurrahman Wahid.

Sjahril also defended the government's decision to take over the management of Bank Bali following the failure of its owners to raise in cash 20 percent of the cost of recapitalization by the government-set deadline.

He said Bank Bali was taken over instead of being shut down because it had a large number of depositors.

After taking over the bank, the Indonesian Bank Restructuring Agency asked Standard Chartered Bank to comanage Bank Bali. The UK-based bank also is committed to buy up to a 20 percent stake in Bank Bali, Sjahril said.

"So everything is according to regulations," he said.

Former Bank Bali president Rudy Ramli has filed a lawsuit at the Jakarta State Administrative Court against Bank Indonesia, charging the central bank with discrimination in allowing Standard Chartered to enter Bank Bali without allowing the former management team to look for alternative investors.

Rudy is now in police custody pending trial for his role in the scandal.(rei/prb/rms/05)