The central bank is under the spotlight again with the House of Representatives questioning the supervisory role of Bank Indonesia (BI) in relation to the Bank Century-Antaboga scam case.
Lawmakers will call in the BI governor and officials to explain the failure to adequately supervize ailing Bank Century to prevent it from selling investment products issued by PT Antaboga Delta Sekuritas, as mentioned in a reported 2006 BI memo.
The memo, the existence of which came to light on Monday, forbade Century from selling the Antaboga product. But Century kept selling the products until 2008.
“Should it (the existence and content of the memo) be true, then it should have been followed up by BI field monitoring to make sure that Bank Century no longer sold the product. Moreover, BI was also wrong in not giving this information to customers,” Dradjat Wibowo, a member of the House Commission XI, told media after the hearing.
The information about the memo was conveyed on Monday by a group of victims of the Century-Antaboga scam in a hearing with the House of Representatives’ commission XI, which oversees financial affairs.
The representative of the group, Siput, said that customers did not have a clue in regard to the content of the memo, saying Century bank management never informed them about this until they were informed by BI officials in a recent meeting.
The case of Century-Antaboga began when the Deposit Insurance Corporation (LPS) took over
Century when its capital adequacy ratio (CAR) — a gauge of a bank’s financial health — went below 0 percent. The central bank requires banks to maintain a minimum CAR of 8 percent.
The case reached its climax when hundreds of customers suddenly could not redeem their investments from Antaboga, following Century’s takeover by the government.
The investment products in question are issued by Antaboga, and Century is the selling agent for the products. Antaboga has a 7.44 percent stake in Bank Century
The case caused the central bank and the Capital Market and Financial Institution Supervisory Agency (Bapepam-LK) to put the blame on each other, with the central bank throwing the ball to Bapepam saying that it is the responsibility of Bapepam to monitor investment products; while Bapepam-LK argued that the problem should have been under the jurisdiction of the central bank as the banking watchdog.
Monday’s hearing highlighted the latest attempt of the victims of the scam to fight for their rights. Their meetings with BI and Bapepam officials have not, so far, been fruitful.
Drajad said that the House commission would question BI further in the next hearing, scheduled to take place later this week.
Also present in the hearing were victims of PT Sarijaya Permana Sekuritas, whose investments disappeared due to embezzlement practices carried out allegedly by Sarijaya president commissioner Herman Ramli. Herman is believed to have embezzled Rp 245 billion of customer funds.
Although Century and Sarijaya bosses had been imprisoned, the victims’ main concern remained unanswered: getting their money back!
“I’m curious what’s behind all this. It is like the authorities are defending Century,” said one of the victims, Noorahman, who was also present in the hearing.