Lawmakers’ suspicions on the motives behind the Century bailout were heightened Tuesday as an inquiry witness said that government was “consulted” days prior to the bailout on state firms’ assets in the bank.
Sitting in the hot seat on Tuesday was former Bank Indonesia (BI) senior deputy governor Miranda S. Goeltom. She spent her second day testifying to the inquiry.
Miranda said that an informal meeting between the government, BI and the Deposit Insurance Agency (LPS) was held on Nov. 13, 2008, on the deteriorating financial state of the bank. Participants included Miranda, BI governor Boediono, and Coordinating Minister for State Enterprises Sofyan Djalil, with Finance Minister Sri Mulyani Indrawati joining by teleconference facility from Washington where she was with the President at a G20 meeting.
“The meeting aimed to report the recent status of Bank Century,” Miranda told the inquiry team.
BI, she said, informed Mulyani that state firms had deposits worth Rp 412 billion in the bank: PT Jamsostek had Rp 212 billion, PT Telkom had Rp 160 billion, PT Perkebunan Nusantara had Rp 10 billion, PT Asabri had Rp 5 billion and PT Wijaya Karya had Rp 20 billion.
Miranda’s statement fueled lawmakers’ suspicions of the possibility that the government may have been biased in salvaging the bank from collapse. She argued the government, particularly Sofyan Djalil had to be informed so that the state firms would not pull their funds out of the bank, so as to prevent the bank from collapsing, which BI deemed posed a serious systemic threat to the banking industry due to the global banking and liquidity crisis.
“We needed to inform the ministers of all necessary data. There was nothing wrong with that,”she said.
Lawmakers at the inquiry team was not satisfied with Miranda’s explanation because of the next day, on Nov. 14, BI revised a regulation on Short Term Liquidity Assistance (FPJP), which initially said that only banks with a minimum capital adequacy ratio of 8 percent would be eligible to accept FPJP assistance. BI changed this to include any bank with a positive CAR. BI’s latest data showed Century’s CAR was 2 percent that day. At about 8 p.m., the same day Century Bank received its first tranche of capital assistance from BI.
BI tried unsuccessfully three times to inject capital to increase the bank’s CAR to required levels, leading to a government decision on Nov. 21 to inject the bank with funds from the Deposit Insurance Agency (LPS). The capital injections from LPS ended on July 24 after a total injection of Rp 6.76 trillion, almost 11 times the amount initially proposed.
“Facts and testimonies emerging at the hearing have made us more convinced that BI was given special treatment,” said Gayus Lumbuun, the inquiry team’s deputy chairman.
Gayus said state firms were not allowed to place their funds in private banks according to existing regulations, “particularly in a bank with a CAR under 8 percent like Bank Century.”
Gayus said the team would use Miranda’s testimony as a lead to find more clues so as to prove that the government had a “special interest” in rescuing the ailing bank.
“We will likely summon Sofyan or other related authorities,” he said.
Sofyan previously said that he was not aware of the state firms’ funds in the troubled bank. “I had no idea. I knew it after the bank was declared as a failed bank and received bailout funds,” he said recently. (bbs)
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