The Corruption Eradication Commission (KPK) is investigating the possible embezzlement of Rp 456 trillion (US$40.6 billion) disbursed to ailing state-owned banks during the 1998 financial crisis as part of the Bank Indonesia liquidity support (BLBI) program.

“We are still evaluating this case, and teams from the KPK, the Attorney General’s Office (AGO) and the Finance Ministry meet every week to discuss this issue,” KPK deputy chairman for enforcement Bibit Samad Rianto told The Jakarta Post on Tuesday.

He said the separate teams were also investigating the transfer of Rp 144.5 trillion to private banks, also as part of the BLBI scheme.

During the 1997-1998 regional financial crisis prior to Soeharto’s downfall in 1998, the central bank disbursed more than Rp 600 trillion in BLBI funds to save the country’s ailing banks.

However, the aid package sparked strong criticism as it was not disbursed under a legal framework.

The investigation had been focused on the distribution of Rp 144.5 trillion in BLBI funds to a number of private banks -- cases that were investigated, but not to conclusion, by the AGO and which the KPK said it would follow up on.

However, Bibit said he was not sure whether his office would actually take over the BLBI cases.

“If the AGO has given up in the investigation, then we will probably take over the case,” he said, adding that the commission would try to jointly investigate the two BLBI cases — one involving private banks and another state-owned banks.

KPK chairman Antasari Azhar previously said the commission was analysing the distribution of “recapitulation” bonds from the central bank to state owned banks in the form of the BLBI funds.

“Did the state banks really need recapitulation bonds or not,” he said.

He added that the KPK would try to reveal whether the loans were used properly and supported by adequate reports.

“We will find the answers to why the assistance funds still burden our state budget with interest,” Antasari said.

The taxpayers had to bear the burden of paying Rp 60 trillion in interest on the bonds per year. Critics say the BLBI scheme was part of a legalized move to loot state funds for business tycoons.

Antasari said the BLBI cases would not be resolved in the near future, but assured that the KPK would solve the cases.

Asked whether the KPK had found it difficult to dig deep into the case, he said his office had not obtained data on the state-owned banks, nor learned how much money in loans they had received, what the loans were for or who had been responsible for the disbursements.

Emerson Yuntho of the Indonesia Corruption Watch accused the KPK of attempting to distract the public’s attention away from the many business tycoons who benefited when the private banks were bailed out.

“I think the KPK is just reluctant to take over these cases that are being handled by the AGO, so the commission is attempting to find other BLBI cases to handle,” he said.

However, Emerson said the KPK should remain dedicated to investigating the cases, especially those involving big debtors.

Popular

Indonesian islanders lose ground as islets put on sale

Labubu dolls ride China soft-power wave

A democratic reckoning for global development finance