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Do internal audits, BI tells state banks
Cash in hand: People withdraw cash from automated teller machines (ATMs) at a shopping mall in Senayan, Jakarta, in this file photo
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Cash in hand: People withdraw cash from automated teller machines (ATMs) at a shopping mall in Senayan, Jakarta, in this file photo. Three state-owned banks have been implicated in a bribery case involving the US-based ATM manufacturer Diebold Inc. (JP/R. Berto Wedhatama) (ATMs) at a shopping mall in Senayan, Jakarta, in this file photo. Three state-owned banks have been implicated in a bribery case involving the US-based ATM manufacturer Diebold Inc. (JP/R. Berto Wedhatama)
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span class="caption" style="width: 510px;">Cash in hand: People withdraw cash from automated teller machines (ATMs) at a shopping mall in Senayan, Jakarta, in this file photo. Three state-owned banks have been implicated in a bribery case involving the US-based ATM manufacturer Diebold Inc. (JP/R. Berto Wedhatama)
Bank Indonesia (BI) has told three state-owned banks to conduct internal audits to track down dubious transactions in relation to a recent bribery case involving US-based automated teller machine (ATM) manufacturer Diebold Inc.
On Thursday, the banking regulator summoned representatives of three out of four state-owned banks, to explain their positions regarding the matter, according to BI spokesman Difi A. Johansyah.
'The state-owned banks will study the problem by conducting internal audits at their respective banks and report the results to BI,' he said, adding, however, that the central bank had set no deadline for them to submit their audit results.
When asked which state-owned bank BI had not summoned for questioning, Difi said: '[The one] with few ATMs.'
The US Securities and Exchange Commission (SEC) has charged Diebold with violating the Foreign Corrupt Practices Act by bribing officials at government-owned banks in Indonesia and China, and at private banks in Russia.
In its statement released on Tuesday local time (Wednesday Jakarta time), the SEC said the company's Indonesian unit, PT Diebold Indonesia, had spent more than US$147,000 between 2005 and 2010 to bribe officials at 'Bank X, Bank Y and Bank Z' to win business deals by taking them on travel and entertainment trips, and giving them other improper gifts.
The SEC's complaint was filed in a federal court in Washington DC and Diebold had agreed to pay more than $48 million to settle the allegations.
Indonesia has four state-owned banks, all publicly listed, namely Bank Mandiri, Bank Rakyat Indonesia (BRI), Bank Negara Indonesia and Bank Tabungan Negara (BTN).
Their financial reports show that Mandiri now has more than 11,000 ATMs, BRI more than 15,000, BNI over 8,000 and BTN nearly 1,500.
BRI corporate secretary Muhamad Ali said it sent its internal audit and compliance team members to fulfill BI's call.
'We were asked to check our past documents, especially ones related to trips between 2005 and 2007. I cannot tell yet whether or not we actually received travel invitations from Diebold during that period,' he said, adding that it would carry out an internal audit as required.
BRI claimed to have stopped using Diebold ATMs in 2007, and to always pay all its own travel expenses.
Mandiri corporate secretary Nixon Napitupulu, who attended the meeting with BI, insisted that there was no misconduct in the bank's ATM procurement projects in the past and declined to reveal the contents of the meeting.
Separately, BI Governor Agus Martowardojo ' Mandiri's president director from 2005 to 2010 ' urged the state-owned banks to explain themselves to the public. 'They need to be transparent if they are publicly listed.'
While maintaining his innocence during his tenure, Agus said a more detailed process was required to resolve the matter.
BNI vice president director Felia Salim said the bank planned to file a complaint with the SEC for using 'government-owned banks' in its statement, after denying any kind of business relations with Diebold Indonesia the day before.
