Travel ban planned for former bank owners
Travel ban planned for former bank owners
JAKARTA (JP): Attorney General Marzuki Darusman said on Monday
that the government would impose a travel ban on former owners
and management of 42 commercial banks who allegedly abused the
government liquidity support.
Marzuki said the travel ban was needed to facilitate an
impending investigation process.
"Minister of Finance Bambang Sudibyo has agreed to impose the
travel ban immediately this week. We have also agreed to
accelerate the investigation process," he announced following a
meeting with Bambang and the head of the Supreme Audit Agency
(BPK).
Bambang said he hoped to be able to issue the travel ban on
Tuesday.
The government, through Bank Indonesia, channeled some Rp
144.5 trillion (US$17.41 billion) in emergency liquidity support
to 48 banks between 1998 and 1999 in an effort to bail them out
amid massive bank runs when confidence in the industry plunged to
its lowest point and the country's financial crisis deepened.
Most of the banks were closed, while the others were
nationalized by the government. But Marzuki said the travel ban
would not be imposed on the former owners of nationalized banks.
He did not give any reasons.
BPK said in its recent report that some Rp 138.4 trillion of
the emergency loans (95 percent) were either misused or channeled
in violation of bank regulations.
Marzuki said his office would first investigate the owners and
management of 10 closed banks because the supporting data was
sufficient.
"This is only the first stage," he said.
He said the owners and management of the other banks would
also be investigated after gathering enough data.
He said the 10 banks included Bank BDNI, Bank Umum Nasional,
Bank Pelita, Bank Modern, Bank Istimarat, Bank Servitia, Bank
Utama (Bank Pesona), Bank Centris, Bank Deka and Bank Aspac.
He said the banks received total liquidity support amounting
to Rp 34.7 trillion.
Marzuki acknowledged that there had been efforts to eliminate
or damage the evidence by the former bankers.
He said this was also a reason why the government had to
impose the travel ban.
Marzuki said the investigation process would also involve
officials of Bank Indonesia due to a possible violation of bank
rulings by the central bank's own people.
"We will also soon investigate the directors at Bank
Indonesia," he said.
The government emergency loans were supposed to be used by the
banks to reimburse depositors' money. But BPK said in its report
delivered to the House of Representatives and the Attorney
General's Office that the banks used the money for other
purposes, including currency speculation, lending to affiliated
business groups and for repaying subordinated loans.
The agency laid the blame for the misuse of the huge liquidity
credits squarely on the extremely poor quality of the central
bank's supervision.
The report said the central bank depended too much on off-site
supervision (assessing written reports), whereas many commercial
banks had manipulated their financial reports for years.
The Rp 144.5 trillion in emergency loans has now become the
government's debt to the central bank. The government will issue
bonds to cover the debt, but it wants to clarify first whether
there was any wrongdoing in the granting of the emergency loans.
More than Rp 100 trillion of the loans were channeled to five
banks -- the nationalized Bank Central Asia (BCA), Bank Danamon
and the now defunct Bank Subentra, Bank Umum Nasional (BUN) and
Bank BDNI.
The previous government signed an agreement with the owners of
the banks on a mechanism to repay their obligations, but the
present government has said it would revise the earlier agreement
on grounds that it only benefited the former bank owners at the
expense of the state or taxpayers. (rei/bkm)