Hans David Tampubolon and Erwida Maulia, The Jakarta Post, Jakarta | Wed, 01/06/2010 8:42 AM
Grandfather’s role: Former Bank Indonesia deputy governor Aulia Pohan shows a portrait of his granddaughter Almira Tunggadewi Yudhoyono while testifying for the Bank Century inquiry committee at the House of Representatives, Jakarta, on Tuesday. Father of President Susilo Bambang Yudhoyono’s daughter-in-law and currently serving a jail term for corruption, Aulia answered questions about his role in the merger of three small banks into Bank Century. JP/Wendra Ajistyatama
An inquiry involving Aulia Pohan, former Bank Indonesia deputy governor, shows BI may have broken its regulations, committing violations while bailing out Bank Century.
The inquiry says that regulations may have been broken or not completely followed when BI approved and supervised the merger of three ailing banks into Bank Century in 2004, as well as during the later decision to save the bank at a total cost of Rp 6.76 trillion (US$716 million).
The bailout is considered scandalous by many legislators and antigraft activists partly because its cost mushroomed ten-fold above the originally estimated cost.
An audit by the Supreme Audit Agency (BPK) says that BI may have violated a number of its own regulations in the procedures used in approving the merger of the three ailing banks, Bank Danpac, Bank Pikko and Bank CIC to form Bank Century.
Aulia, who is also the father of President Susilo Bambang Yudhoyono’s daughter-in-law, is considered by observers to be one person having had access to key information regarding Bank Century, especially during the merger process, having been the former deputy governor for bank supervision at a key time.
During the session, conducted by the House inquiry committee on the Bank Century saga, Aulia acknowledged that the three banks did not meet all the requirements set by BI regulations to approve and oversee the merger and the setting up of the new bank.
For instance, he acknowledged, that while under central bank regulation, banks should submit their financial reports for the previous three years in a row. However two of these banks did not.
“However, we cannot see everything in black and white when we talk about the banking industry. We need to be wise and prudent. We also need to remember that the priority of BI is to prevent banks from failing,” he said.
That’s why, he said, BI pushed through with the merger despite not meeting all the regulatory requirements, with this raising the suspicions of the legislator that BI had been too lenient and that Aulia was “in love with the bank.”
When asked by Fahri Hamzah, a committee member from the Prosperous Justice Party (PKS), how many times former Bank Century owner Robert Tantular had committed violations, Aulia said three times.
Fahri told the former deputy governor that he calculated Robert had lied to BI or violated the central bank’s regulations at least 11 times.
“This shows a huge amount of permissiveness,” he alleged.
Muhammad Romahurmuziy of the United Development Party (PPP), pointed out that BI appeared to alter its own regulations at will.
Aulia also appeared to avoid admitting personal responsibility in the matter.
Each time a committee member asked Aulia who was responsible for the merger, his answers mostly expressed his lack of detailed knowledge on the matter.
Separately, BPK chief Hadi Purnomo said the agency was ready to launch a new audit on flows of funds of the troubled Bank Century.
“Yes, we can complete the audit based on an official request from the House, according to existing regulation,” Hadi said Tuesday after an event at the Presidential Palace.
Hadi added previous BPK findings on the Rp 6.76 trillion Bank Century bailout fund should have been followed up had there been “valid reasons”.
