An investigation into alleged irregularities surrounding the disbursement of Bank Indonesia liquidity support (BLBI) entered a new phase on Thursday after Corruption Eradication Commission (KPK) investigators questioned former vice president Boediono in the case.

The alleged corruption is one of the biggest cases handled by the antigraft body as it reportedly caused Rp 4.5 trillion (US$332 million) in state losses.

The former vice president went to the KPK headquarters in Jakarta at around 9:50 a.m., to the surprise of reporters as investigators had not scheduled questioning him for Thursday.

He was questioned as a witness for suspect Syafruddin Arsyad Temenggung, former chairman of the Indonesian Bank Restructuring Agency (IBRA), whom the KPK named a suspect in April. He was detained by the antigraft body last week.

“The witness came voluntarily today for the questioning because he claimed that he won’t be able to answer it at the scheduled time,” KPK chairman Agus Rahardjo told reporters on Thursday morning.

Boediono remained tight-lipped when approached by reporters after the questioning. “Let the KPK explain everything,” he said.

KPK spokesman Febri Diansyah later added that investigators questioned Boediono pertaining to his knowledge as finance minister during the time Syafruddin issued a controversial letter freeing a bank from the obligation to pay the debt owed to the government.

According to a 1999 presidential regulation, the finance minister was a member of the Financial Policy Advisor Committee (KKSK) – the committee that approved the issuance of a letter freeing Bank Dagang Nasional Indonesia (BDNI) from the obligation to pay its debt to the government, as Syafruddin said last week.

Syafruddin, who was appointed IBRA chairman in 2002, issued a letter for Sjamsul Nursalim, the owner of BDNI, freeing him from the obligation to pay Rp 3.7 trillion in debt owed to the government, which disbursed the funds under the BLBI scheme.

Both Boediono and Syafruddin took office during the presidency of Megawati Soekarnoputri from 2002 to 2004.

Syafruddin’s decision was based on a presidential decision issued by Megawati in December 2002, regulating the “release-and-discharge” letters, freeing recipients of the funds from the obligation to fully repay their debts.

Sjamsul’s BDNI received Rp 28 trillion of the BLBI funding and was obligated to return Rp 4.8 trillion, but Syafruddin decided that the bank should only pay Rp 1.1 trillion by selling its assets in the form of fish ponds.

However, an audit report from the Supreme Audit Agency (BPK) released in October revealed that the value of assets sold to pay the remainder of the debt was only around Rp 220 billion.

During the 1997-1998 Asian financial crisis, the government, through the central bank, provided liquidity support of Rp 144.5 trillion to assist 48 commercial banks in coping with massive runs during the monetary crisis, but 95 percent of the money was eventually embezzled.

In 2014, the KPK decided to probe the issuance of a release-and-discharge letter for Sjamsul and found indications that the decision could have been the result of collusion between Sjamsul and Syafruddin.

Sjamsul, who is also the owner of tire giant Gajah Tunggal and coal miner Bukit Baiduri Energi, is currently in Singapore and the KPK has urged him to return to the country for questioning.

Thursday was the first time KPK investigators questioned Boediono as a witness in the case. Meanwhile, Syafruddin was the first official to be named a suspect in the case after a three-year investigation that looked into old documents and saw former ministers in former president Megawati Soekarnoputri’s Cabinet undergo questioning.

Popular

Wilmar executive, lawyers found guilty in $4 million palm oil bribery case

When data flows, can banking supervision follow?

Why the Philippines needs dedutertefication