KPK Chairman Abraham Samad said on Tuesday his commission will independently investigate the Bank Century case through carefully observed legal process and will base the case purely on legal facts.
Jakarta (ANTARA News) - The Corruption Eradication Commission (KPK) will soon begin questioning witnesses in the Rp6.7 trillion Bank Century scandal but has not provided any names of persons it intends to summon.

KPK Chairman Abraham Samad said on Tuesday his commission will independently investigate the Bank Century case through carefully observed legal process and will base the case purely on legal facts.

However, the anti-graft agency chief did not provide the names of those who will be summoned and questioned as witnesses. The summoning of witnesses will be carried out after the commission completes its questioning of those involved in the alleged corruption case in the procurement of traffic-police driving simulators on Monday.

"We should not speculate on the Bank Century case because we have not yet examined the witnesses and suspects. So let us hope that after the examination of the driving simulators` case on Monday, we can begin questioning witnesses in the Bank Century case," Abraham Samad stated on Tuesday.

He claimed he did not yet know the names of those who would be questioned as witnesses in the bailout scandal, which took place in late 2008. "The selection of witnesses will be decided according to data available to the KPK. We do not know who they are yet because the KPK investigating team is still verifying their stories. We don`t yet know their names. I, myself, as the KPK chairman have not yet been informed of the decision. I am still waiting for the reports from the investigating team," he said.

The case began in late 2008 when Bank Century, during the economic crisis, faced liquidity and default problems. It collapsed after its liquid assets, amounting to some Rp11.6 trillion, were withdrawn through its security firm Antaboga Delta Sekuritas and stashed abroad by its owner Robert Tantular.

The ailing bank was then taken over by the Deposit Insurance Agency (LPS). The government later supported it with a bailout of Rp6.7 trillion through the issuance of a Short-Term Funding Facility (FPJP) and Temporary Capital Participation (PMS), renaming it Bank Mutiara.

The amount provided by the government was far higher than the Rp1.3 trillion package, which was still under deliberation by the House of Representatives (DPR) at the time. Thus, the bailout sparked public criticism and scrutiny since it had been disbursed without the approval of the DPR.

Spurred into action by public suspicion, the State Audit Board (BPK) conducted an investigative audit and found evidence of violations.

In his audit report to the DPR in November 2009, BPK Chairman Hadi Poernomo explained the alleged violations in the Bank Century case. He said these violations concerned the bank`s merger process and Bank Indonesia`s (BI/the central bank) supervision. Bank Century completed a merger between several banks during the 2008 economic crisis.

The violations included the granting of the FPJP funds, the naming of Bank Century as a failed bank that could cause a systemic impact, the use of FPJP funds, and the injection of interim capital (bailout funds) as well as unsound practices in the bank`s management.

According to the audit report, investigators suspected an effort to orchestrate raising the bailout amount to Rp6.7 trillion from its initial estimate of between Rp632 billion and Rp1.3 trillion.

"The Rp6.7 trillion bailout funds were disbursed in four stages. But the disbursement of the second phase, worth Rp2.2 trillion, was done without consulting the Coordination Committee (KK).

This was against LPS regulation No. 3/PLPS/2008," Hadi Poernomo remarked after handing over the BPK audit report to House Speaker Marzuki Alie. Based on the BPK audit, additional bailout funds for Bank Century have been engineered so that the bank will receive injected capital not only to meet its capital adequacy ratio (CAR) requirement but also to meet its need for increased liquidity.

The BPK also found that BI and the Financial System Stability Committee (KKSK) did not apply measured criteria in concluding that if Bank Century was allowed to collapse, it would have a systemic impact on the banking world.

Poernomo noted that Bank Century had been taken over by the LPS solely based on Government Regulation in lieu of Law No.4/2008 and without comprehensive, measured and up-to-date data on the bank`s condition. Likewise, KKSK`s decision that Bank Century had become a failed bank, where it did not mention the costs the LPS had to incur, also violated LPS Regulation No. 5/LPS/2006, he said.

After all, Hadi Poernomo stated, the Rp5.86 trillion loss suffered by Bank Century was a loss that had emerged as a result of unsound practices and violations committed by the bank`s executives and other parties.

The DPR later set up an inquiry committee to examine the suspected violations in the provision of the bailout as reported by the BPK. At the end of their inquiry at a plenary session, seven of the nine factions of the DPR in the committee acknowledged that violations had been committed with regard to the issuance of the FPJP funds and the PMS.

The DPR later left the case to the KPK to investigate it further, setting up a team to monitor the progress of the investigation. According to the KPK, the BPK has found nine alleged violations in the disbursement of the Rp6.7 trillion bailout funds.

The KPK is now focusing its attention on locating US$163.48 million worth of securities related to the case and understanding the flow of credit at Bank Century (Bank Mutiara).

So far, the KPK has officially named two suspects in the Bank Century bailout scandal: BM (deputy for foreign exchange management at BI) and SCF (deputy for BI supervision). However, the KPK has not issued a letter of investigation for the questioning of the two BI officials. Hence, their roles in the scandal have not yet been made public.

Boediono, now the vice president, was the governor of BI between May 2008 and May 2009 when the bailout funds were disbursed to Bank Century (Bank Mutiara).

Asked whether KPK has proof of Boediono`s role in the scandal as the BI governor at the time, Abraham said he did not want to speculate on an issue that was not yet based on legal facts.

"KPK will not speculate on the issue or get trapped in political matters, but it will work professionally. We cannot draw any premature conclusions. We will first examine the witnesses and suspects and then draw conclusions," he stated.

In a meeting with the House Supervisory Team to discuss the case on Tuesday, Abraham noted that if the president and vice president were involved in a legal case, that case would be handled by the DPR through its Right of Expressing Opinions based on the Constitutional mechanism.

Abraham acknowledged that Boediono in his capacity as the BI governor at the time could have had a role in the disbursement of the bailout to Bank Century.

Indonesia`s House Speaker, Marzuki Alie, pointed out that the KPK had every right to question Boediono about the extension of the FPJP funds. "Please question him. Pak (Mr) Boediono said he is ready to assist the KPK. But why should we make a fuss and tarnish his image? He is a good person," Marzuki remarked. (*)

Reporter: Andi Abdussalam
Editor: Heru Purwanto
Copyright © ANTARA 2012