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Bank Century scandal causes Rp7.4 trillion losses to the state JAKARTA - Bank Century scandal caused a loss of Rp7.4 trillion in state fund, the Supreme Audit Agency (BPK) said on Monday. The loss was a result of short term loan facility (FPJP) to Bank Century, and the determination of the sick lender as a failed bank, which have potential systemic impact, BPK Chairman Hadi Poernomo said here on Monday.

The government defended the granting of the FPJP and the determination of Bank Century as a failed bank saying allowing the bank to collapse could trigger run on bank amid the global financial turbulence in 2008. The House of Representatives, however, decided the bail out illegal, a decision that led to legal investigation by the Corruption Eradication Commission (KPK).

Two former deputy governors of Bank Indonesia, Budi Mulya and Siti Chodijah Fajriah were already named suspects by the anti graft body which has also questioned Vice President Boediono, who was then governor of the central bank, which facilitated the bail out.

"Based on the investigative audit, BPK came to a conclusion, there had been malfeasance committed by related officials in granting the FPJP from Bank Indonesia to Bank Century causing a loss of Rp689.3 billion in Nov. 2008 and in determining Bank Century as a failed bank that could trigger systemic impact that cause a loss of Rp6.76 trillion, which were given as a capital participation by LPS (state-owned Deposit Insurance Agency) in Bank Century from 24 Nov 2008 to 24 July, 2009," Hadi Poernomo said.

BPK submitted a report of an investigative audit of state loss to KPK on Monday about alleged corruption in granting the FPJP and in determining Bank Century a failed bank with systemic impact. In the report which was only wrapped up on Dec 20, 2013, BPK presented all details of alleged wrongdoings with officials as the policy makers, Hadi said.

"All are clear in the report who doing what, but we could not name one by one," he said. Hadi confirmed that all losses in FPJP and the losses as a result of naming Bank Century a failed lender that could trigger run on bank were state losses.

Some who defended the government and Bank Indonesia said there was no loss in state fund as the LPS raised the fund in premiums from its service from banks. Meanwhile, KPK chairman Abraham Samad said the anti graft body would study the report.

"We just received the report. We will announce to the public everything related to the case of Bank Century," Samad said here on Monday. KPK already put Budi Mulya in detention since last month. Siti Chodijah Fajriah, could not yet be questioned as she is still ill.

"The arrest of Budi Mulya is an early step expected to bring into the open the Bank Century case," Samad said, adding investigation would not end with Budi Mulya.

Budi Mulia and Siti Fajriah were charged with facilitating the granting of the bail out fund by LPS although the bank did not meet the criteria to be entitled to capital participation by LPS.

At that time the bank had only a capital adequacy ratio of 2.02 percent, much below the minimum limit of 8 percent to be entitled to FPJP. Bank Indonesia even changed the criteria, its own regulation, to allow the bank to receive the FPJP.


Related blog entries (category 'Corruption') Related blog entries (category 'Corruption'):
21 December 2013 · Agung: 'Atut case will not significantly affect Golkar'
20 December 2013 · KPK detains Banten governor Ratu Atut
19 December 2013 · Djoko Susilo receives much higher sentence in High Court
17 December 2013 · KPK names Banten governor as suspect in 2 corruption cases
17 December 2013 · KPK searches house of Banten governor Ratu Atut
17 December 2013 · Banten governor Ratu Atut charged with graft

Related blog entries (category 'Corruption') Tags: scandal, fraud, Bank Century, investigation, bailout


Posted in Corruption @ 23 December 2013 21:17 CET by Blog Bot · 'Blog' RSS feed · permalink






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