Loan scandal hits Bank Mandiri

Loan scandal hits Bank Mandiri

MAGELANG, Central Java: Some Rp 24 billion (US$2.8 million) has
been embezzled from Bank Mandiri's Magelang branch, adding yet
another scandal to Indonesia's bank industry.

"Three people have been named suspects, and they are being
questioned by the police," said Insp. Gen. Didi Widayadi, the
chief of Central Java Police, on Friday.

He said that the scheme, which was used by the irresponsible
parties, was similar to the one committed by suspects in the BNI
and BRI scandals recently.

The BNI loan scandal centered on the channeling of export
credits without proper appraisal by the bank's Kebayoran Baru
branch in South Jakarta to a number of local companies to finance
the export of commodities to the Congo and Kenya.

The exporters, identified as the Petindo Group and Gramarindo
Group, backed up their loans request with letters of credit
(L/Cs) from banks in Kenya, Switzerland and the Cook Islands. It
later turned out that the exports never materialized, causing BNI
to lose Rp 1.7 trillion. -- JP