Soedradjat named suspect in BI loan abuse
Tertiani ZB Simanjuntak and Muninggar Sri Saraswati, The Jakarta Post, Jakarta
Former Bank Indonesia governor Soedrajat Djiwandono has extended the central bank's hall of shame after he was declared a suspect in a Rp 19 trillion (US$2.1 billion) financial scandal involving the central bank's liquidity credit (BLBI) funds.
Attorney General's Office spokesman Barman Zahir said on Thursday that Soedradjat had allegedly abused his power in extending loans to now-defunct commercial banks while he was in office between 1996 and 1998.
State prosecutors had placed Soedrajat on the suspect list on May 7, Barman said.
"The suspect, together with several of his directors, had allegedly abused his authority by issuing clearance facilities or dispensations to commercial banks receiving the emergency loans under the supervision of the central bank," he said.
The investigators estimated that Soedradjat had caused Rp 19 trillion (US$2.1 billion) in losses to the state.
Besides Soedrajat, three central bank directors, namely Heru Soepraptomo, Paul Soetopo and Hendrobudiyanto, will stand trial in the same case.
Soedrajat's successor and still-incumbent BI governor Sjahril Sabirin was sentenced in March to two years jail in another financial scandal involving a BLBI loan for Bank Bali. Sjahril remains free as he has appealed the conviction.
The state prosecutors will question Soedradjat, who is son-in- law to the late economic guru Soemitro Djojohadikusumo, as a suspect. They are now preparing the summons.
The central bank disbursed Rp 144.5 trillion in liquidity support to 48 commercial banks struggling to overcome massive runs during the peak of the financial crisis sweeping the country between 1998 and 1999.
The Supreme Audit Agency (BPK) has found that 95 percent or Rp 138.4 trillion of the emergency loans had either been misused or been extended in violation of banking regulations.
Instead of reimbursing depositors during the runs, the bank owners used the money to speculate on foreign exchange, to lend them to affiliated businesses or repay subordinated loans -- thanks to poor supervision from the central bank.
The public have seen several bankers brought to trial, but not all of the court's verdicts have been popular.
Bank Aspac's owner Hendrawan Harjono and Bank Umum Servitia's David Nusa Wijaya received one-year jail terms respectively and were ordered to pay back the money they had misused.
But, there was a breakthrough when the Central Jakarta District Court sentenced BHS Bank's president Hendra Rahardja to life in prison, although he has fled to Australia and is awaiting extradition proceedings.
Different courts in Jakarta are now hearing the cases of Bank Modern, Bank Umum Nasional, Bank Surya, South East Asia Bank and Ficorinvest Bank, with charges of misusing billions of rupiah in state funds.
The prosecutors are not waiting for the fleeing suspects to return to the country and are preparing in-absentia trials.
Also on Thursday, the Central Jakarta District Court ordered prosecutors to bring in Bank Surya's deputy commissioner Bambang Sutrisno and president director Adriawan Kiki Ariawan.
The court also ordered the prosecutors to contact the Indonesian embassy in Singapore, the country where Bambang now resides, and advertise the summons in The Jakarta Post, Media Indonesia, Kompas and Republika daily newspapers.