TheJakartaPost

Please Update your browser

Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.

Jakarta Post

B'€™day bash turns ugly for Hadi

Unhappy birthday to you: Outgoing Supreme Audit Agency (BPK) chief Hadi Poernomo addresses his well-wishers at his farewell party, which coincided with his 67th birthday, at his office in Jakarta on Monday

Haeril Halim and Rendi A. Witular (The Jakarta Post)
Jakarta
Tue, April 22, 2014

Share This Article

Change Size

B'€™day bash turns ugly for Hadi Unhappy birthday to you: Outgoing Supreme Audit Agency (BPK) chief Hadi Poernomo addresses his well-wishers at his farewell party, which coincided with his 67th birthday, at his office in Jakarta on Monday. On the same day, the Corruption Eradication Commission (KPK) named him a suspect on the allegation that he granted bank BCA a tax objection worth Rp 5.7 trillion when he served as taxation director-general during 2001-2004. (Antara/Puspa Perwitasari) (BPK) chief Hadi Poernomo addresses his well-wishers at his farewell party, which coincided with his 67th birthday, at his office in Jakarta on Monday. On the same day, the Corruption Eradication Commission (KPK) named him a suspect on the allegation that he granted bank BCA a tax objection worth Rp 5.7 trillion when he served as taxation director-general during 2001-2004. (Antara/Puspa Perwitasari)

U

span class="inline inline-center">Unhappy birthday to you: Outgoing Supreme Audit Agency (BPK) chief Hadi Poernomo addresses his well-wishers at his farewell party, which coincided with his 67th birthday, at his office in Jakarta on Monday. On the same day, the Corruption Eradication Commission (KPK) named him a suspect on the allegation that he granted bank BCA a tax objection worth Rp 5.7 trillion when he served as taxation director-general during 2001-2004. (Antara/Puspa Perwitasari)

Less than six hours after celebrating his 67th birthday and the revelation of foul play in the additional bailout of Bank Mutiara, previously Bank Century, outgoing Supreme Audit Agency (BPK) chairman Hadi Poernomo was named a suspect by the Corruption Eradication Commission (KPK) on Monday for his alleged role in a tax crime.

The alleged crime revolves around Hadi'€™s decision during his tenure as the Finance Ministry'€™s director general of taxation between 2002 and 2004 to discriminatively approve a request by Bank Central Asia (BCA), now the nation'€™s third-biggest lender, for income tax leniency.

KPK deputy chairman Bambang Widjojanto said that the agency was investigating the possibility that Hadi might have accepted kickbacks in exchange for his decision to approve BCA'€™s request.

'€œHis decision caused state losses and it benefited other parties,'€ Bambang said.

The KPK has estimated state losses of Rp 375 billion (US$31.2 million) as a result of Hadi'€™s decision.

'€œWe have found sufficient evidence to name HP [Hadi Purnomo] a suspect in the case. He has been accused of violating Articles 2 or 3 of the Corruption Law,'€ KPK chairman Abraham Samad told a press briefing at KPK headquarters.

If found guilty, Hadi could face a maximum sentence 20 years behind bars.

Abraham denied any link between the announcement of Hadi'€™s status with his last day serving as BPK chairman.

The case began when BCA fielded a request with the income tax directorate on July 12, 2003 for income tax leniency as a result of bad loan restructuring worth Rp 5.7 trillion in 1999.

After evaluating the request for one year, the directorate announced on March 13, 2004 that it had turned down the request.

'€œBut one day before the deadline for BCA to pay the taxes, HP, in his capacity as director general of taxation annulled the decision and granted BCA the request,'€ Abraham said.

'€œThis was the central role of HP in the alleged crime,'€ he went on.

Abraham said that other banks had also fielded similar requests at the time, but they had all been rejected by Hadi.

'€œOf all the banks that applied, only BCA was granted the privilege,'€ Abraham said.

While serving as the tax boss, Hadi was dubbed by many as '€œthe almighty'€ due to his overwhelming authority over tax regulations and supervisions.

He was also among then president Megawati Soekarnoputri'€™s favorite bureaucrats, seen regularly accompanying her and late husband Taufik Kiemas.

Then reform-minded finance minister Sri Mulyani Indrawati dismissed Hadi as director general of taxation in 2006, several years before his retirement. Hadi'€™s ouster marked the start of sweeping reform in the tax system.

Prior to the KPK'€™s announcement, Hadi invited journalists to the BPK headquarters in Central Jakarta to jointly celebrate his birthday along with his wife, daughter and grandson.

It was also a farewell event as Hadi was retiring from the agency.

However, on the sidelines of the ceremony, Hadi announced the BPK'€™s latest audit on Bank Mutiara'€™s Rp 1.25 trillion bailout, which was submitted to the House of Representatives on April 18.

The BPK distributed the audit summary to journalists '€” a surprise move by the agency known to be shrouded in secrecy.

The audit has revealed signs of accounting manipulation and failure by the management to uphold the principal of prudent banking.

The Deposit Insurance Corporation (LPS) was forced to inject the additional capital into the bank on Dec. 23 to meet Bank Indonesia'€™s (BI) minimum capital requirements due to a sudden surge in the bank'€™s bad loans.

Bank Mutiara has received more than Rp 8 trillion in bailout funds since the Rp 6.7 trillion injected in 2008 and 2009 due to misappropriation that could have led to the bank becoming insolvent and potentially causing systemic problems for the banking sector.

 In response to the KPK'€™s decision, Hadi refused to comment much, saying that he respected the legal process.

Hadi was elected BPK chairman in 2009 after serving as an economic analyst with the National Intelligence Agency (BIN) right after his dismissal as the tax boss in 2006.

 

Who is Hadi Poernomo?

* Finance Ministry director general of taxation, 2001-2006
* National Intelligence Agency (BIN) strategic analysis council head of economic analysis, 2006-2009
* Supreme Audit Agency (BPK) chairman, 2009-2014

 

Noted actions

* Spearheading the BPK'€™s audit into the Bank Century bailout, the controversy of which has dogged the administration of President Susilo Bambang Yudhoyono.
* Under his leadership, the BPK launched an audit into the construction of the Hambalang sports complex, which lead to the prosecution of members of Yudhoyono'€™s inner-circle.
* Stalling reform initiated by former finance minister Sri Mulyani Indrawati at the graft-ridden tax office.

{

Your Opinion Matters

Share your experiences, suggestions, and any issues you've encountered on The Jakarta Post. We're here to listen.

Enter at least 30 characters
0 / 30

Thank You

Thank you for sharing your thoughts. We appreciate your feedback.