Witnesses fail to satisfy prosecutors

Witnesses fail to satisfy prosecutors

JAKARTA (JP): Central bank director for bank supervision
Maulana Ibrahim failed on Thursday to answer prosecutors'
questions over the alleged misallocation of Rp 583.4 billion
(US$61.4 million) in Government Liquidity Support funds (BLBI) by
former Bank Aspac director Hendrawan Haryono.

Maulana told the South Jakarta District Court that he did not
understand the banking terms specified by prosecutor Sidik
Latuconsina.

He was confused when Sidik asked: "Can the BLBI be used for
foreign exchange activities?"

One of the judges, I.D.G. Putra Yadnya, said "You are a
supervising director and you do not understand the questions.
What about us (judges)?"

But Maulana testified that the BLBI funds could not be used by
Bank Aspac owners and banks' related parties, including its
affiliated companies.

"I know that Bank Aspac was a well-performing bank. But I did
not know the bank's financial condition," he said.

Maulana said he did not know the problems that Bank Aspac was
facing until it was put under Indonesian Bank Restructuring
Agency (IBRA) supervision.

He said Bank Aspac had received the government facility in the
form of promissory notes worth Rp 1.5 trillion.

"The funds were cashed in 1997 before the bank's operation was
frozen," he said.

The official said the facility was provided by the government
to help ailing banks overcome liquidity problems during the
monetary crisis.

He said he did not know whether Bank Aspac had met the
requirements to obtain the promissory notes, such as transaction
documents, 20-year discount facilities, fixed assets or other
loans, as he was not yet in his current post when the liquidity
support funds were disbursed to the bank.

Thursday's hearing also heard the testimony of witness Zaenal
Hasni, the central bank's executive supervisor, who also claimed
to have no idea about the disbursement of liquidity support funds
to Bank Aspac.

Hendrawan, along with then Bank Aspac president Setiawan
Harjono, was arrested last April.

Setiawan, who will be tried separately, has yet to appear in
court as he is receiving treatment at Mitra Keluarga Hospital in
East Jakarta.

Hendrawan's lawyer L.M.M. Samosir argued that liquidity
support fund cases involving another 47 banks had been settled
through IBRA offices.

At a preliminary hearing, prosecutor Soetantyo said Hendrawan,
46, had violated Article 1 of Law No. 3/1971 on corruption, which
carries a maximum punishment of life imprisonment.

Soetantyo said the defendant, along with Setiawan, had abused
his authority to enrich himself or others at the expense of the
state between February 1998 and February 1999.

The prosecutor also accused Hendrawan of violating Article 49
of Law No.7/1992 on banking. This Article carries a maximum
sentence of 15 years imprisonment.

Soetantyo said Bank Aspac received Rp 583.4 billion from the
central bank in December 1997 as part of the government's
liquidity support scheme.

However, after receiving the funds from the central bank,
Hendrawan reportedly allocated a part of the money for foreign
exchange trading and to finance the operations of some
corporations affiliated with Bank Aspac.

Presiding judge Muchtar Ritonga adjourned the hearing until
next Thursday to hear the testimony of two other central bank
officials. (01)