The Attorney General’s Office has outlined difficulties in probing alleged graft in the central bank’s Netherlands-based unit Indonesische Overzeese Bank N.V. (Indover), citing issues over jurisdiction and witnesses as the main obstacles.
The AGO has been requested by Finance Minister Sri Mulyani Indrawati to revive a suspended 2001 graft probe into Indover as it seeks to unravel the recent mess in the collapsed bank.
AGO spokesman Jasman Pandjaitan said Tuesday his office was still in the dark about following up on the case, due to different legal systems in Indonesia and the Netherlands, where the alleged graft took place.
“The alleged crime took place in the Netherlands where loan disbursement is not considered a criminal act,” he said.
“Therefore we’re looking for alternatives, including finding out whether any other violations have also taken place in Indonesia.”
Jasman said difficulty summoning witnesses posed another challenge for prosecutors.
“Most of the witnesses are abroad. This will take some time. Good coordination with the Foreign Ministry is therefore needed,” he said.
On Oct. 31, Bank Indonesia announced it would let Indover fold, after failing to execute a planned 545.6 million euro bailout. The central bank had earlier failed to secure written approval for the bailout from legislators before a deadline set by the Dutch authorities.
The initial decision to salvage Indover was driven primarily by a BI-issued “support letter” that was somehow misinterpreted as evidence of a central bank guarantee to the bank’s creditors, as well as binding the government to the bank’s obligations.
Local and overseas creditors insist BI be held responsible for leading them into the mess resulting from the support letter.
Enraged by the debacle, BI and the Finance Ministry demanded the AGO probe the case, with BI also launching an internal investigation to resolve the mess.
A source at the central bank, however, said some senior BI officials were attempting to foil the investigation by refusing to cooperate in providing necessary information on Indover, as well as trying to find a scapegoat for the fiasco.
“There is a crack in the central bank over the Indover issue. External auditors should step in to make things clear,” the source said.
In 2001, the AGO began an investigation into a US$1 billion loan scandal in Indover, naming the bank’s former president director Sidharta S.P. Suryadi and former managing director of its Hong Kong unit Permadi Gandapraja as suspects in the misappropriation of the loans.
To date, however, the case remains bogged down in uncertainty.
On Tuesday, BI announced it had formed a special team to settle problems with related parties over the settlement of Indover’s obligations.
“The team will represent BI in a deal with all local and overseas parties in relation to the Indover case,” BI said.
Farid Harianto, former deputy head of the Indonesian Bank Restructuring Agency (BPPN), has been appointed to lead the team in seeking mutually beneficial resolutions for all parties. (hwa)
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