Tue, 06 Aug 2002

Lenient sentences demanded for three ex-bankers

Muninggar Sri Saraswati, The Jakarta Post, Jakarta

State prosecutors said on Monday three former directors of the now-defunct South East Asia Bank (SEAB) were guilty of misusing Bank Indonesia liquidity support funds, but asked the court to show them leniency because the bankers had reimbursed the state for its losses.

Chief prosecutor Godang Riadi Siregar asked the West Jakarta District Court to sentence Handy Sunardio to one year in prison, Jemy Sutjiawan to 10 months and Leo Andywan to eight months.

He also asked the court to fine each of the defendants Rp 1 billion.

According to the prosecutor, Handy and Jemy misused the liquidity support by disbursing the money to their own companies.

Both defendants, as well as Leo Andywan, are also guilty of violating banking laws, he said.

Earlier in April, prosecutors said in their indictment that the three defendants had misused liquidity support funds and caused Rp 158 billion (US$16.5 million) in losses to the state.

But on Monday, Godang said the defendants had only misused Rp 39.9 billion. In explaining this discrepancy, the prosecutor blamed experts at the Supreme Audit Agency and the central bank for miscalculating the amount of misused liquidity support.

"Handy and Jemy handed over 10 hectares of land valued at Rp 54 billion and 16 hectares of land valued at Rp 4 billion, respectively. This covered the state's losses, which were only Rp 39.9 billion," Godang said.

According to the prosecutor, Handy and Jemy asked the central bank for a Rp 158 billion loan in 1996, with their bank facing financial difficulties. Bank Indonesia approved the request on Sept. 17, 1996, and released the liquidity support to help SEAB stave off bankruptcy.

However, Godang said, the defendants used some of the money for their own interests, disbursing it to a number of companies in the same business group. The bank was warned against such practices twice in 1997 by the central bank.

Presiding judge M. Saleh adjourned the trial until Friday, at which time the defendants' lawyers will present their case.

The central bank disbursed Rp 144.5 trillion in liquidity support to rescue 48 troubled banks from 1996 to 1997. The Supreme Audit Agency later announced that 95 percent of this money was misused.

But the law has been slow in catching up with those bankers guilty of misusing the funds.

Many people are upset because they believe the legal system has failed to adequately punish the guilty and ensure the state recoups its losses.

The Central Jakarta District Court acquitted last Friday Bank Modern commissioner Samadikun Hartono, who had been accused of misusing Rp 1.7 trillion in liquidity support funds.

In March, David Nusa Wijaya of Bank Umum Servitia was sentenced to one year in jail for misusing liquidity support and causing the state losses of Rp 1.27 trillion.

The West Jakarta District Court said in its verdict that the light sentence was justified because it would give David, who was not detailed, the opportunity to reenter the workforce and raise the money he promised to repay to the state.

David's current whereabouts, however, are unknown.