One-year jail term sought for ex-banker

One-year jail term sought for ex-banker

Muninggar Sri Saraswati, The Jakarta Post, Jakarta

Due to a lack of evidence, prosecutors recommended that the
Central Jakarta District Court sentence former president
commissioner of now-defunct Bank Modern Samadikun Hartono to one
year in jail for misusing Bank Indonesia Liquidity Support (BLBI)
funds in 1997.

Chief prosecutor Y.W. Mere, who had earlier indicted Samadikun
for allegedly misusing Rp 1.7 trillion in BLBI funds, also
demanded the defendant pay a Rp 20 million fine.

During the hearings, which started in August last year,
prosecutors found that the bank had misused only Rp 169 billion,
not Rp 1.7 trillion as originally alleged.

It was also proven, Mere said, that the bank had disbursed the
money in several installments to several companies within the
Modern group, which was owned by Samadikun.

However, Mere said that Samadikun was only responsible for the
purchase of promissory notes issued by state-owned electricity
company PT PLN, worth Rp 11.9 billion, by Bank Modern, using the
BLBI funds.

"As president commissioner, Samadikun was responsible for
permitting the bank to disburse a loan worth Rp 10 billion or
more," he said, adding that expert witnesses in the hearing
supported the assertion.

The government provided the BLBI funds from 1998 to 2000 to
assist 48 commercial banks to deal with massive run during the
monetary crisis. But apparently some Rp 137 trillion (US$13.3
billion) of the funds was misused during 1998 and 1999.

The central bank channeled the funds in several ways,
including the provision of overdraft facilities for the troubled
banks. It enabled troubled banks to participate in the clearing
process even though, technically, their funds were not
sufficient.

Mere admitted that Bank Modern had used the overdraft facility
to withdraw Rp 80 billion in loan to a company in the Modern
group. However, he argued that the disbursement was lawful as
Bank Modern had withdrawn the funds through a clearing account.

"It was lawful, according to a letter from the central bank in
1997, which permitted fund withdrawals through the clearing
process," Mere told reporters after the hearing.

Wearing a yellow batik shirt, Samadikun appeared calm,
although he refused to make any comment.

The state has suffered more than Rp 137 trillion (US$13.3
billion) in losses through BLBI misuse.

Several cases have been taken to court in the hope that BLBI
abusers would be punished and the state retrieve the funds.
However, the outcome has been unsatisfactory.

The government lost its first legal battle, as the South
Jakarta District Court acquitted of corruption charges last year
Hendrawan Haryono, former deputy director of now-defunct Bank
Aspac.

But he was sentenced to one year in jail for violating Article
49B of Banking Law No. 7/1992. The court ordered him to pay Rp
500 million in compensation, although the bank had caused state
losses amounting to Rp 583.4 billion due to BLBI misuse.

Another defendant, David Nusa Wijaya of Bank Servitia, was
sentenced earlier this year to one year in jail and was ordered
to repay Rp 1.27 billion in BLBI funds, which his bank had
misused, to the state.

Tougher sentences were handed down by the Central Jakarta
District Court, which sentenced Hendra Rahardja of Bank BHS to
life, as well as Eko Edi Putranto and Sherny Kojongian of the
same bank, to 20 years in jail. However, they were tried in
absentia.

Banking law expert Pradjoto warned earlier that most judges
and prosecutors, who had little or no knowledge on the issue,
could easily be fooled by defense lawyers who would cunningly
argue that their clients were innocent because they had only
followed state policy on BLBI.