The Supreme Audit Agency (BPK) has started a "preliminary" audit into the financial troubles of Century Bank that led to the Rp 6.76 trillion (US$676 million) government bailout.
"We have carried out a preliminary audit that will be strengthened by a request from the House of Representatives for a more detailed audit," BPK main auditor II Syafri Adnan Baharuddin told reporters Friday.
On Thursday, the House's commission XI overseeing financial affairs, said it would send a letter to the BPK to audit the Rp 6.76 trillion bailout, disbursed by the Deposit Insurance Corporation (LPS) to prevent Century from bankruptcy.
The LPS injected Rp 2.78 trillion worth of funds on Nov. 23 last year, Rp 2.2 trillion on Dec. 5, Rp 1.12 trillion on Feb. 3 and Rp 630 billion on July 21.
On Nov. 20 last year, the central bank declared Century a failed bank after its capital adequacy ratio (CAR) plunged to negative 153 percent, according to the LPS. The central bank stipulates a minimum CAR of 8 percent.
Legislators want the details of how the large bailout fund was used.
"There should be an investigation," said legislator Harry Azhar Aziz.
"The money belongs to the people, from the fees they paid *as deposit guarantees*."
Auditor Syafri said the BPK would audit BI and the LPS to find out the precise details of the case.
"We're trying to map the data before we step forward to a more thorough audit."
Syafri refused to say whether there had been a misuse of funds in the Rp 6.76 trillion bailout.
"We are not able to prove anything before the audit is finished. We have the same question; how could the bailout reach Rp 6.76 trillion?" he said.
The BPK aims to finish the preliminary audit before the Idul Fitri holiday, which takes place on Sept. 22, and carry out a more detailed audit after the holiday.
Central bank senior deputy governor Darmin Nasution said the bailout seemed to have reached an end as Century had now registered profits.
According to the LPS, Century posted Rp 199.48 billion in unaudited profits on July 31, up from Rp 140 trillion reported on June 30. Meanwhile, its CAR reached 9.28 percent on July 31, up from 8.25 percent on June 30.
Darmin said the government and the central bank decided to save Century due to the negative impacts its collapse would have had on the financial sector.
There were five banks in similar conditions and 18 other peer banks that would have suffered if had Century collapsed, which would have caused a rush on banks.
