WB questions Djoko decision

JAKARTA (JP): The World Bank has questioned the decision of the South Jakarta District Court on Monday to drop all charges against a main suspect in the high profile Bank Bali scandal, according to a senior official at the Indonesian Bank Restructuring Agency (IBRA).

IBRA legal division chief Pandoe Djajanto said on Tuesday that the Bank was questioning the ability of Indonesia's courts to resolve the financial crime.

"The World Bank Jakarta representative called us this morning. They want clarification and are asking about the legal procedures of the case," Pandoe told reporters.

The World Bank and the International Monetary Fund have demanded Indonesia resolve the Bank Bali case in a credible way as a prerequisite for their continued assistance to help finance the country's economic reforms.

The South Jakarta District Court dropped the indictment of businessman Djoko S. Tjandra, a defendant in the bank scandal, on a legal technicality.

Presiding Judge R. Soenarto said the judges did not have the authority to try the case as there was insufficient evidence implicating the defendant's involvement in the alleged crime.

"It's a civil case, not a criminal one. Therefore, it's the authority of a team of judges in a civil case to rule whether the cessie contract was illegal or not," Soenarto said.

He added that if the state has suffered losses from the defendant's alleged corrupt practices, it could demand compensation from the defendant in a civil case.

The Attorney General's office is seeking an appeal of the court ruling.

The scandal centers on the transfer of some Rp 546 billion (US$73.7 million) from the bank to a private firm called PT Era Giat Prima (EGP) as a commission for its factoring service to help the bank recoup some Rp 904 billion in interbank claims on closed down banks from IBRA.

Bank Bali should not have used the service of EGP because the interbank claims were guaranteed by IBRA, an agency under the Finance Ministry.

The transfer of the Rp 546 billion fee caused serious losses to Bank Bali, which was being recapitalized by the government.

The case emerged in July 1999 and became a high profile scandal as several high ranking government officials were allegedly involved and part of the money was believed to have been transferred to the Golkar Party, to help finance the presidential campaign of then president B.J. Habibie.

The scandal contributed to Habibie's failure in the presidential bid.

The Habibie administration claimed that part of the money had been returned to the central bank.

Djoko and the Golkar Party denied all the allegations. Djoko repeatedly claimed that the fee was normal in a factoring contract transaction, also called cessie transaction.

But international accounting firm PricewaterhouseCoopers said in its September 1999 audit report that there were indications of fraud in the Bank Bali scandal.

President Abdurrahman Wahid, elected in October 1999, promised the country's major donors to put top priority on resolving the Bank Bali scandal.

This has prompted the IMF and the World Bank to resume loan disbursements to the crisis-hit country.

Relations with the IMF and WB were suspended when Habibie was accused of delaying a thorough resolution of scandal.

The South Jakarta District Court's verdict came less than a week after the Jakarta State Administrative Court (PTUN) issued a ruling that annulled an October 1999 decision of IBRA which canceled the cessie (factoring) contract and ordered the commission fund to be used to help finance the recapitalization of Bank Bali.

IBRA's Pandoe said that the agency filed an appeal to the PTUN court on Tuesday. (rei)