IBRA zeros in on official over bank furor

IBRA zeros in on official over bank furor

JAKARTA (JP): The powerful Indonesian Bank Restructuring
Agency (IBRA) said on Monday it was investigating the alleged
involvement of one of its deputy chairmen in the high-profile,
multimillion dollar Bank Bali scam.

"It (the allegation) is still being investigated. We need
more time," IBRA public relations officer Franklin Richard told
reporters.

He added that the senior official remained active in the
agency despite the investigation process.

Franklin was responding to accusations made by legal banking
expert Pradjoto last week that a senior official at IBRA, under
the initials PL, was involved in a rent seeking activity.

PL declined to meet the media.

Separately, Pradjoto said on Monday that he and his family
were threatened and terrorized by certain people after he
disclosed the Bank Bali scam.

"How can I make a further comment if my family is being
threatened," he told reporters on Monday when asked to provide
further evidence of the involvement of other government officials
in the scam as he promised last week.

Pradjoto said last Friday that PL and two executives of the
ruling Golkar Party colluded to force Bank Bali to provide a huge
fee to help the bank recoup its interbank claims on closed-down
banks.

Tempo, the weekly newsmagazine, identified PL as Pande Lubis,
a deputy chairman at IBRA responsible for settling interbank
claims.

"This kind of allegation, which I got from a very reliable
source, has to be thoroughly investigated. Why are these rent
seekers still operating amid this difficult time," Pradjoto said
at a banking seminar last week.

He said it was possible that such a rent seeking activity also
occurred at other banks.

Pradjoto said that Bank Bali had Rp 3 trillion (US$441.2
million) in interbank credits on three closed-down banks; Bank
Dagang Nasional Indonesia (BDNI), Bank Bira and Bank Umum
Nasional (BUN).

The banks were closed down by the government in March, but
under the government's blanket guarantee program, such interbank
claims should have been covered and paid by IBRA, an agency under
the finance ministry, which is now in control of various banking
assets worth some Rp 600 trillion.

Pradjoto said that the scam occurred after Bank Bali failed to
collect the interbank credits from IBRA.

He said that two senior officials, who were identified by
Tempo as Golkar deputy treasurer Setya Novanto and businessman
Djoko Chandra, a shareholder of the five-star Hotel Mulia in
Jakarta, and the IBRA official came to offer assistance to Bank
Bali directors to recover the Rp 3 trillion credits but with a
huge fee.

Pradjoto said that on June 2, some Rp 900 billion was
transferred to Bank Bali, and the next day some Rp 550 billion
was withdrawn from the bank and transferred to the rent seekers
as the fee payment.

He speculated that part of the money was used to finance the
campaigning activities of Golkar during the recent election
period.

Franklin confirmed on Monday that IBRA had transferred Rp 900
billion into Bank Bali's account in the central bank on June 1 to
settle its interbank claims on Bank BDNI.

"We had conducted a verification process before we made the
payment," he said.

But Franklin said that IBRA declined to repay the Bank Bali's
claims on other banks because they didn't fit the terms and
conditions of the joint Bank Indonesia-IBRA ruling on the blanket
guarantee.

Franklin also doubted that Pande Lubis could have solely
authorized the repayment of the Bank Bali interbank claims
because such a decision would have to be discussed with IBRA
chairman Glenn S. Yusuf and four other deputy chairmen.

The U.K.-based Standard Chartered Bank has signed an
investment agreement with IBRA to buy a 20 percent stake in Bank
Bali in return for its management control. (rei)