Third former BI director convicted

Third former BI director convicted

Muninggar Sri Saraswati, The Jakarta Post, Jakarta

A third former Bank Indonesia (BI) director was sentenced on
Friday to two-and-a-half years in jail for abuse of power in the
disbursement of Bank Indonesia liquidity support (BLBI) funds
amounting to Rp 2.21 trillion in 1997 to five ineligible banks.

Defendant Paul Soetopo Tjokronegoro was convicted by the
Central Jakarta District Court for the illegal disbursements to
the banks, including the now-defunct Bank BHS.

Six other former BI officials, namely former governor
Soedrajad Djiwandono, former directors Hendrobudiyanto and Heru
Soepraptomo, and former members of the board of directors
Haryono, Mukhlis Rasyid and Boediono, who is now the Minister of
Finance, have also been implicated in the same affair.

Hendrobudiyanto and Heru Soepraptomo have already been
convicted and were sentenced to three years in jail respectively.

These two, however, together with Tjokronegoro, remain free
pending appeal.

Soedrajad has been named a suspect in the case by the Attorney
General's Office.

"The policy taken by the defendant, along with the other BI
officials, caused losses to the state and burdened the state
budget at a time when the country was suffering from an economic
crisis," Presiding Judge Panusunan Harahap told the court.

He said Paul, who was the director in charge of supervision
and foreign relations, should have suggested to BI, which is
responsible for handling state funds, that clearing facilities
for the five ailing banks should be halted, instead of continuing
with the disbursement of the funds.

Paul had violated a presidential instruction issued on Dec. 3,
1997, which ordered BI to disburse the funds only to healthy
banks during the financial crisis, the verdict said.

However, the judges dismissed the prosecution's demand for
Paul to pay Rp 2.21 trillion in compensation, saying that the
BLBI funds were directly channeled to the ailing banks through
the clearing process, instead of in cash.

Both Paul and chief prosecutor Heru Chaerudin, who sought a
five-year immediate jail term for Paul, were considering an
appeal against the verdict.

Paul, 63, was given a lenient sentence due to his service to
the state and his advanced age.

In its audit report on the 2000 state budget, the State Audit
Agency (BPK) said that about 95 percent of the Rp 144.5 trillion
in BLBI funds extended to 48 ailing banks during the crisis had
been misused by the bankers.

Some 20 bankers have been prosecuted in connection with the
scandal. Many of them have been acquitted or have received
lenient punishments despite the fact that the funds have never
been returned to the cash-strapped state.