Two more detained in BNI scandal

The Jakarta Post, Jakarta

Police arrested two more suspects on Monday for their alleged involvement in a Rp 1.7 trillion (US$200 million) loan scandal at publicly-listed Bank Negara Indonesia (BNI), the country's second largest bank.

National Police detectives chief Insp. Gen. Erwin Mappaseng said the suspects, Afilia Widarta and Yudhi Baso, were directors at private companies Gramarindo and Petindo Group that received the loans.

The companies reportedly received huge loans from BNI by using fake letters of credits from banks in Kenya, Switzerland, and the Cook Islands as collateral.

"So, we have detained five suspects, two from BNI and the remaining three from the private companies," Mappaseng told reporters.

He said police planned to summon executives from ABN AMRO, HSBC, Standard Chartered and Bank Indonesia as witnesses in the case.

Meanwhile, State Minister for State-Owned Enterprises Laksamana Sukardi said the board of directors of BNI would be replaced during its shareholders's extraordinary meeting in December in the wake of the US$200 million lending scam.

"The agenda of the meeting will surely be their replacement," he told journalists Monday.

However, he said he was still waiting for reports from the commissioners and supervisory board members before deciding on any action.

"I am waiting for the reports from the commissioner and supervisory board about who was responsible for and involved in the ... scam."

Laksamana said the scandal could not have occurred without the involvement of insiders. Therefore, he said he had asked investigators to be completely objective in looking for those involved.

If any of the directors were involved, he or she would not only be replaced, but also be prosecuted in a court of law, he said.

Laksamana also asked the current board of directors to track down the Rp 1.7 trillion of embezzled funds.

Police have declared ten suspects in the case so far, including the former head of BNI's Kebayoran Baru branch.