Police say they have sufficient grounds to indict 9 bankers

P.C. Naommy, The Jakarta Post, Jakarta

Police claim they have sufficient evidence to indict nine executives of the now defunct Bank Dagang Bali (BDB) and Bank Asiatic for fraud involving Rp 1.2 trillion (US$139).

"We have strong evidence of the role of those nine people in this case," National Police Deputy Spokesman Brig. Gen. Soenarko D. Ardanto said on Thursday.

Suspicion of the involvement of the banks' high ranking officials surfaced after police studied files and documents submitted by Bank Indonesia and after a technical meeting with a team from BI, the Attorney General's Office and a team from Bali Police on Wednesday.

The police have asked the deputy attorney general for political affairs to impose a travel ban on the nine bankers. A travel ban can be issued only for people who have been declared suspects.

Of the nine executives of the defunct banks, five are from Asiatic: Tong Muk Keung (majority share holder), FB Surendro (former president director), Won Tommy Sentana (former marketing director), Ignatius Eddy Candra (former credit director) and Made Budiana (former fund marketing director).

The executives from BDB are I Gusti Ngurah Oka Budiana (former chief commissioner),I Gusti Made Oka (the majority share holder), Gede Wibawa (former treasury official), and I Nengah Suwardhana (former Jakarta branch head).

Soenarko said the investigating team was currently preparing all necessary measures before summoning the officials for questioning.

According to the central bank, the alleged irregularities center on a number of lending frauds and legal lending limit violations involving affiliated companies which turned out to be fictitious.

The problem came to light after BDB placed funds at Asiatic in the form of interbank loans and Negotiable Certificates of Deposit (NCD), which were later on used as loan collateral by the son of BDB's owner, who is married to a daughter of the Asiatic's owner.

The amount of loans provided to the son of BDB's owner exceeded the legal lending limit allowed under the banking law. The loans accounted for 70 percent of Asiatic's total assets of Rp 1.7 trillion.

Existing banking regulations stipulate that a bank is allowed only to lend a maximum of 10 percent of its lending exposure to an affiliated company.

BDB is a Bali-based lender with 31 branches, 632 employees and 408,000 depositors. The Jakarta-based Asiatic bank employed around 150 staff and had 2,200 depositors.