BI failed to report fraud before bailout: Minister
Aditya Suharmoko, The Jakarta Post, Jakarta | Tue, 09/01/2009 4:45 PM
Bank Indonesia (BI) officials did not notify the government of any fraud when they met to discuss a plan to bail out Bank Century in November 2008, Finance Minister Sri Mulyani Indrawati said Tuesday.
"BI did not report any fraud because if it knew there was fraud taking place, they should have requested the arrest of Century's owners," Mulyani told reporters.
She said BI reported Century only as a failed bank, which was in need of liquidity immediately, otherwise the bank would default.
BI and the Finance Ministry knew about the embezzlement of Century's third-party funds by the owners only after they decided to bail out the bank, Mulyani said.
