Erwida Maulia and Aditya Suharmoko, The Jakarta Post, Jakarta | Thu, 09/03/2009 11:27 AM
As the case of Bank Century's costly bailout continues to unfold, President Susilo Bambang Yudhoyono said on Wednesday he did not want to intervene in a case that was not in "his domain".
State Secretary Hatta Radjasa told reporters that, while the President was well-informed about the case, he had requested the finance minister and Bank Indonesia take charge of all explanations regarding the issue.
Last November, the government declared Century a failed bank, and injected a huge Rp 6.76 trillion (US$665.03 million) into the troubled financial institution to keep it afloat.
"The President has asked the finance minister and Bank Indonesia *BI* to provide explanations, because such issues are not in the domain of the President. Furthermore, the Financial System Stability Committee *KSSK* and BI control and supervise the banking sector."
Hatta added that the President had been receiving reports about the issue and had been kept in the loop with developments in the case.
"The President does not want to intervene. The President also received reports *about the issue* while he was traveling overseas."
When Yudhoyono was abroad on Nov. 13, ten days before the Deposit Insurance Agency (LPS) injected the first Rp 2.78 trillion into the failed bank, he told Finance Minister Sri Mulyani Indrawati to save the national economy.
"So as to save our national economy *the President said* and prevent possible disruptions. I think it was normal to ask for such preventative measures."
The Supreme Audit Agency (BPK) is now auditing Century's financial health, with the Corruption Eradication Commission (KPK) having pledged to launch a full-blown investigation into the case if signs of irregularities were found.
Some lawmakers and analysts have already questioned the government's decision to bail out the bank.
Critics argue that not only did the bailout turn out to be huge - much bigger than the original estimated Rp 2.7 trillion - but it also lacked transparency as the bank's collapse was largely the result of shareholder fraud, and had little to do with the impact of the global financial crisis.
Outgoing Vice President Jusuf Kalla complained the bailout was initiated without his permission, as deputy to the President who was abroad at that time.
Lawmaker Achmad Hafiz Zawawi suspects large depositors might have forced BI to bailout the bank as they risked losing money.
Indonesian Corruption Watch has said the huge fund withdrawal raised suspicions the rescue was mainly aimed at saving the funds of big depositors, rather than preventing a systematic threat, as claimed by the central bank.
Reports among others mentioned that the family of Sampoerna and Arifin Panigoro, as well as several state companies - PT Jamsostek, PT Timah, and PTPN - were some of the largest depositors.
However, a source close to Arifin denied any connection to the scandal, and said Arifin did not have an account with Century.
