Don’t bank on it: Customers at the branch office of Bank Century in Senayan, Jakarta, on Monday. The Corruption Eradication Commission (KPK) plans to investigate allegations of fraud surrounding the distribution of the Rp 6.7 trillion (US$676 million) bailout for the bank. JP/R. Berto Wedhatama
Vice President Jusuf Kalla turned up the heat in the debate over whether the government should have bailed out Bank Century last November, saying he would have disapproved of the costly bailout had he been consulted before hand. He said the bank should not have been bailed out as it’s problems were largely caused by fraud, and not the impacts of the global economic crisis.
Kalla told a press conference Monday that the decision to bail out Century, made by Finance Minister Sri Mulyani Indrawati and then central bank governor Boediono, was done so without his permission as deputy to President Susilo Bambang Yudhoyono, who was abroad at the time.
The vice president said he first received a report about the bailout from Mulyani and Boediono on Nov.
25 last year — two days after the Deposit Insurance Corporation (LPS) injected Rp 2.78 trillion (US$274.62 million) in to Century on Nov. 23, a Sunday — contradicting Mulyani’s remarks that she made a report to Kalla on Nov. 22.
The fact that the bailout took place on a Sunday was also questioned by Kalla.
"The Finance Minister's statement suggested I was told about the bail out on Nov. 22. But I did not know about it, I received the report on Nov. 25, after the funds were transferred."
Mulyani separately admitted that Kalla was right. "But whatever the date, I still made a report, didn't I?" she said.
Kalla added that if he had known about it, he would not have approved the bail out.
"The case of Century was a criminal one, as the bank's owners robbed their own bank and took the money abroad. There were also worthless bonds there because of a poor supervision by Bank Indonesia."
He said he disapproved of bailing out troubled banks taking into account the 1997 financial crisis, in which the government had to spend about Rp 600 trillion (US$60 billion) in taxpayers' money to bail out troubled banks — a debt that is still being paid.
The takeover of Century by the government, via the Deposit Insurance Agency (LPS), led to a Rp 6.76 trillion bailout — more than twice the originally calculated Rp 2.27 trillion — something that has drawn criticism for lack of transparency.
The Corruption Eradication Commission (KPK) has requested the Supreme Audit Agency (BPK) audit the bailout, saying that if any irregularities are found a full-blown investigation would be launched.
"In response to the report from the finance minister and the BI governor, I said the case of Century did not result from the crisis, but from embezzlement by its owners,” Kalla said.
"I asked [then] BI governor Boediono to report this case to the police, to arrest [Century owner] Robert Tantular and other directors who were responsible by confiscating the assets. But BI did not dare do it, saying there was no legal foundation to do so."
Robert Tantular, former owner of Century, is in police custody and has recently been charged with allegedly cashing in on a deposit belonging to one of the bank’s large depositors.
Unconfirmed rumors are circulating that the decision to rescue the bank was made to salvage funds belonging to high-profile, well-connected people.
