Sat, 05 Apr 2003

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.