YPPI accountable in BI corruption case

The Jakarta Post ,  Jakarta   |  Thu, 09/18/2008 10:34 AM  |  National

A court session trying government officials implicated in a Bank Indonesia (BI) graft case on Wednesday heard that the management of the Indonesian Banking Development Foundation (YPPI) had not been authorized to transfer assets to the central bank.

Banking law professor Erman Rajagukguk told the Corruption Court that he had informed the government it could not claim BI assets even though it had injected money into the central bank because the bank was an independent institution.

"In accordance with Law No. 23/1999 on Bank Indonesia, the bank's assets do not concern the state and BI's financial affairs are separate from the state budget," Erman, a former State Secretariat official, said as quoted by Antara.

Therefore, BI does not need approval from the Finance Ministry on matters that have nothing to do with the state budget, including the financing of a foundation, Erman said.

He gave his testimony during a court hearing of a case trying former BI governor Burhanuddin Abdullah and other bank officials for allegedly embezzling Rp 100 billion in YPPI funds in 2003.

The money was channeled to members of the House of Representatives' Commission IX on financial affairs as well as to lawyers defending former BI officials on trial for misusing BI liquidity support funds.

Erman said BI could borrow money from the YPPI but was not allowed to claim it.

The YPPI was founded by Bank Indonesia to help the central bank and other banks develop their human resources.

Erman said there was no law that banned the YPPI from lending its money.

However, he said the foundation's management would be held responsible for lending its money to other institutions.

The YPPI's management has claimed it was following BI orders when it transferred Rp 100 billion to the central bank's account in 2003, but Erman said the excuse did not absolve them of responsibility.

The graft case surfaced following an audit conducted by the Supreme Audit Agency on the central bank's financial report.

The agency found that the bank's board of governors had approved a move to use the YPPI money to pay for legal assistance for former BI officials implicated in a BLBI corruption case and to help the House accelerate a settlement of the BLBI graft case and pass an amendment to the BI law.

Also standing trial for their roles in the BI case are former BI deputy director for legal affairs Oey Hoey Tiong, suspended head of Surabaya's BI office Rusli Simanjuntak, and Golkar politicians Hamka Yandhu and Antony Zeidra Abidin.

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