With the Supreme Audit Agency (BPK) now reviewing the Bank Century's finances, a full-blown investigation by the Corruption Eradication Commission (KPK) into possible irregularities may follow.
The BPK has already started its preliminary audit into the financial troubles of Century, which led to a massive Rp 6.76 trillion (US$676 million) government takeover that began last November — more than double the initial estimate of Rp 2.77 trillion — prompting questions from legislators and the public alike.
The KPK, which recommended the BPK audit in the first place, has, along with the House of Representatives, pledged that any irregularities uncovered by the BPK will be followed up by the KPK. This could lead to a thorough investigation into the case in an effort to minimize state losses and punish violators.
Deputy KPK chairman Haryono said Sunday that to date, the KPK had not determined whether there were any irregularities in the bailout, carried out by the Deposit Insurance Corporation (LPS).
“If the BPK's audit shows any existing rules have been breached in the bailout, we will definitely conduct further investigations,” Haryono said.
He added the KPK would work on the case with the National Police, and would thoroughly investigate all stakeholders in the case, including Century and the LPS.
The KPK’s possible investigation into the troubled bank's bailout could help shed some light on questions raised by the Century case.
Century had to be bailed out late last year following the central bank’s decision to declare the lender a failed bank due to its severe financial troubles.
Chief among the reasons for Century’s financial woes are allegations of banking fraud by its main shareholders.
Robert Tantular, Century’s former owner, is currently in police custody and has recently been charged by prosecutors for illegally cashing in on a deposit account belonging to one of the bank’s large depositors.
While the alleged wrongdoings that led to the bank’s collapse are already being investigated by the police, the BPK — and perhaps later the KPK — is tasked with looking into how the Rp 6.76 trillion bailout fund was spent, and whether the payout or implementation of the fund was entirely legal.
The massive bailout has drawn the ire of Vice President Jusuf Kalla, who said the figure was an exorbitant sum that demanded a full investigation.
He added that as the vice president, he should have been consulted about the issue, particularly because it involved such a considerable chunk of state funds.
Kalla, whose tenure as vice president is nearing its end, has built up a reputation for handling financial affairs over his five years as President Susilo Bambang Yudhoyono's deputy.
The LPS, however, in its defense insists the bailout scheme was valid, saying that it acted only as the executor of a policy drawn up mostly by the central bank — including the verification of the Rp 6.76 trillion fund.
The bailout was funded in several stages, with the LPS injecting Rp 2.776 trillion on Nov. 23, Rp 2.201 trillion on Dec. 5, Rp 1.155 trillion on Feb. 3 and Rp 630 billion on July 21.
LPS executive chairman Firdaus Djaelani said at a press conference Sunday that the LPS had injected the funds as part of its duty to keep Century afloat and prevent the wider failure of the nation's banking sector. (nia)
