Wed, 17 Dec 2003

IBRA official quizzed over misuse of Rp 20.9t

Abdul Khalik, The Jakarta Post, Jakarta

The police have started investigating alleged misuses of Account 502 by questioning a senior official at the Indonesian Bank Restructuring Agency (IBRA).

A police investigator who declined to be named said on Tuesday that the IBRA bank restructuring unit deputy chairman I Nyoman Sender had been summoned to shed light on alleged misuses of the Rp 20.9 trillion (US$2.47 billion) held in the account.

"We have questioned Sender as a witness to begin the investigation of the case. This is based on public reports that we received in November," said the police investigator from the National Police's detectives division.

Contacted separately, Sender confirmed that he had been questioned for eight hours as a witness at National Police Headquarters to clarify IBRA's role in the case.

According to the police investigator, Sender's questioning was just the beginning of a series of probes involving officials that would be held over the coming weeks.

Account 502 was opened by the government at Bank Indonesia as a bridging fund to repay third party deposits held in banks closed down at the height of the economic crisis in 1997 and 1998.

Only Bank Indonesia (BI) and IBRA had access to the account, created as part of the government's blanket guarantee scheme to help restore confidence in the country's banking industry.

The Supreme Audit Agency (BPK) alleged in August that some Rp 20.9 trillion from the account had been misused by BI and IBRA.

The BPK audit report was the result of an investigation undertaken at the request of the House of Representatives in mid 2001, after most of the funds (approximately Rp 53.8 trillion) in the account had been used.

The audit request was made after the government decided to set up a second account worth approximately Rp 40 trillion for the same purpose. The new account is known as Account No. 509.

The audit report said that of the Rp 20.9 trillion of allegedly-misused funds, Rp 17.77 trillion had been used by BI and the remainder by IBRA.

Of the Rp 17.7 trillion funds used by BI, Rp 14.45 trillion was allegedly taken in May 2000. BI regarded the funds as being available for additional liquidity support loans (BLBI) on top of the Rp 144.5 trillion in funds injected into troubled banks by the central bank during the first phase of the BLBI program.

BI injected hundreds of trillions of rupiah into ailing banks under the program to prevent the banking sector from collapsing after it was severely hit by the economic crisis in the late 1990s.

Both BI and IBRA claim that there was no wrongdoing involved in the use of the funds and that everything had been done in line with the prevailing rules and regulations.

BI has already granted permission to the National Police to examine the account as a further step toward a full investigation of the case.

"We were given permission to check Account No. 502 today. We hope to finish examining the account as soon as possible," said National Police detective's deputy chief Insp. Gen. Suyitno Landung.