T

he Corruption Eradication Commission (KPK) has said that it is confident that the Jakarta Corruption Court will hand down a hefty sentence to former Bank Indonesia (BI) deputy governor Budi Mulya for his role in the controversial Bank Century bailout in 2008.

KPK prosecutors are seeking a 17-year prison term for Budi in the case, which according to the Supreme Audit Agency (BPK), caused state losses of more than Rp 7 billion (US$596,440).

In its indictment, KPK prosecutors said Budi had behaved criminally in the bailout policy together with other senior BI officials, including former BI governor Boediono, now the country'€™s Vice President.

KPK spokesman Johan Budi said that if the judges'€™ verdict confirmed the criminal involvement of other individuals in the bailout, then the antigraft body would soon launch fresh investigations.

'€œThe KPK will follow up whatever the panel of judges decides in its verdict. We expect the judges to approve the KPK prosecutors'€™ sentence demand for Budi Mulya,'€ Johan said on Tuesday.

KPK prosecutors said that Budi and a coterie of colleagues abused their authority by channeling Rp 689 billion in short-term financial assistance (FPJP) to keep the bank afloat, and by falsely claiming that Bank Century posed a systemic threat to the banking sector, making it eligible for Rp 6.7 trillion from the Deposit Insurance Corporation (LPS).

According to the KPK, other individuals besides Budi and Boediono that were also considered responsible for the policy comprised former BI senior deputy governor Miranda Goeltom and then BI deputy governors Siti C. Fadjrijah, Budi Rochadi, Muliaman Hadad, Hartadi Sarwono and Ardhayadi Mitroatmodjo.

Others implicated in the case include former Bank Century shareholder Robert Tantular and president director Hermanus Muslim, as well as economist Raden Pardede, who was the then secretary of the Financial System Stability Committee (KSSK).

As for the FPJP disbursement, KPK deputy chairman Bambang Widjojanto said Budi and his '€œcolleagues'€ insisted on disbursing the FPJP to Bank Century by amending a BI internal regulation to make the bank eligible for the financial backing.

To obtain the FPJP, the bank'€™s capital adequacy ratio (CAR) was required to be within positive parameters, but Century was allocated the FPJP despite its CAR being minus 3.53 percent, Bambang said.

'€œTo make Century eligible, cooked-up data was provided to make Bank Century'€™s CAR look good for the FPJP,'€ he added.

A day before the bailout decision, then BI director of the banking research and regulation directorate, Halim Alamsyah, now BI deputy governor, presented an assessment stating that Bank Century did not pose a systemic risk.

BI'€™s board of governors, however, disregarded Halim'€™s assessment and decided not to present it at an upcoming KSSK meeting to determine whether or not to rescue Century.

According to Budi'€™s indictment, the board was concerned that the assessment would hamper its efforts to get the KSSK to agree to the bailout.

The board insisted that Century posed a systemic risk, and requested BI'€™s banking supervisory directorate to shape its analysis to support its stance, according to the document.

Separately, Budi'€™s lawyer, Luhut Pangaribuan, said he was confident that the panel of judges at the court would acquit his client.

'€œThe bailout decision was made at a time when the banking sector was suffering a crisis, and the policy was also approved by the President. Thus, the court should acquit my client,'€ Luhut said on Tuesday.