State set to receive billions in BLBI funds

The Jakarta Post ,  JAKARTA   |  Tue, 06/30/2009 10:54 AM  |  National

Bank Permata (formerly Bank Bali) has finally released Rp 546.5 billion (US$53.3 million) worth of Bank Indonesia Liquidity Assistance (BLBI) funds stashed in the bank's escrow account to the state.

The half-a-trillion rupiah worth of funds is linked to two criminals, jailed former central bank governor Syahril Sabirin and fugitive businessman Joko Soegiarto Tjandra.

The deal between the bank and prosecutors from the South Jakarta Prosecutor's Office was settled after seven hours of negotiations at the Bank Permata head office Monday.

Prosecutors had been trying to seize the money since the Supreme Court issued its verdict sentencing Syahril and Joko to two years in prison and declaring the money belonged to the state. The bank, however, insists it owns the money due to a civil lawsuit which ruled in favor of Bank Bali.

"We just implement what the Supreme Court has ruled," said South Jakarta chief prosecutor, Setya Untung Arimuladi, following the meeting.

The lawyer for the bank, Pradjoto, said the money would be transferred to the Ministry of Finance's account at Bank Indonesia (BI).

Finance Minister Sri Mulyani Indrawati said she did not expect the fund transfer to cause any issues in the banking sector.

"From a legal perspective, what is important is that the parties involved acknowledge the Supreme Court's case review decision and return the money to the state," she said.

"We don't want to cause any unnecessary problems that could result in negative impacts on to the bank, since the amount is large and the movement of funds will create unnecessary difficulties."

Bank Permata is Indonesia's eighth largest bank, according to BI. As of April, Permata channeled Rp 34.43 trillion worth of loans through its institution, while having Rp 42 trillion worth of third-party funds.

The exact value of the funding to be returned to the state has been disputed since the BLBI case emerged in 1999.

According to one of Bank Permata's lawyers, Luhut MP Pangaribuan, the Supreme Court has handled six cases, both criminal and civil, involving the funds with various verdicts.

In a number of cases the court ruled the money belonged to Bank Bali, while others ruled that Joko's company PT Era Giat Prima (EGP) was the owner. However, the most recent ruling concluded that the money belonged to the state.

"If the state want the money, let them have it," Otto Cornelis Kaligis, Joko's lawyer, said last week.

An insider at Bank Permata told The Jakarta Post on the condition of anonymity that several Bank Permata's investors and business partners had begun asking the bank questions in relation to the BLBI scandal.

"They are worried about the business they are doing with the bank, since Rp 546.5 billion is a huge amount of money," he said.

A Permata Bank customer said she was surprised when she learned Bank Permata was "involved" in a corruption scandal.

"It seems Bank Permata is not safe. I probably need to close my account here," she told the Post.

However, the bank's director of legal and compliance issues, Herwidayatmo, said that Bank Permata had never been seriously affected by the BLBI scandal.

"Our performance and market confidence remain solid and stronger than ever," he said.

"We will cooperate with the directive from the prosecutors in line with the Supreme Court's ruling, because we fully obey the law." (bbs)

Aditya Suharmoko contributed to the article from Jakarta

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