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Five charged with graft in Jiwasraya scandal
Fall from grace: The former president director of state-owned insurance company Asuransi Jiwasraya, Hendrisman Rahim (center), is escorted wearing a detainee suit after being questioned at the Attorney General’s Office in South Jakarta on Tuesday
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all from grace: The former president director of state-owned insurance company Asuransi Jiwasraya, Hendrisman Rahim (center), is escorted wearing a detainee suit after being questioned at the Attorney General’s Office in South Jakarta on Tuesday. Hendrisman was arrested over his alleged involvement in corruption at Asuransi Jiwasraya. (Antara/Dhemas Reviyanto)
The Attorney General’s Office (AGO) detained on Tuesday five people for their role in alleged corruption at ailing state-owned insurer Asuransi Jiwasraya.
Former Jiwasraya president director Hendrisman Rahim, former finance director Harry Prasetyo and former head of investment and finance Syahmirwan were detained on Tuesday afternoon for their alleged involvement in Jiwasraya’s investment mismanagement.
Publicly listed property firm PT Hanson International president director Benny Tjokrosaputro and publicly listed PT Trada Alam Minera president commissioner Heru Hidayat were also named suspects and arrested, Antara reported.
"Five suspects have been detained," junior attorney general for special crimes Adi Toegarisman said as quoted by tribunnews.com on Tuesday.
The suspects have been charged with "unlawfully or intentionally enriching oneself or another person or corporation causing state losses" as stipulated in articles 2 and 3 of the 2001 Corruption Law.
Benny and Harry were the first to be seen being escorted out of the AGO building at around 5 p.m. after being questioned earlier in the day, followed by Heru shortly after.
Around an hour later, handcuffed Hendrisman came out of the building, followed by Syahmirwan. All five were wearing AGO pink suspect vests.
The AGO last year launched its investigation into Jiwasraya over alleged mismanagement after the country’s oldest insurer failed to pay out on JS Saving Plan policies, which integrated life insurance and investment, worth Rp 802 billion (US$57.6 million) that fell due in October 2018. The insurer was also unable to pay out on matured policies amounting to Rp 12.4 trillion due in December 2019.
The AGO has also slapped travel bans on 13 individuals, four of whom were named suspects on Tuesday. Syahmirwan is not subject to a ban.
State-Owned Enterprises (SOEs) Minister Erick Thohir said he appreciated the Supreme Audit Agency (BPK) and the AGO's efforts in handling the case.
“Firm and balanced measures are important in handling Jiwasraya's case to achieve justice and to restore the public's faith in the company,” he said in a statement on Tuesday evening in response to the arrests.
“Investigations of the past are also a way to govern a company today and for a better future," he added.
Earlier on Tuesday, the AGO scheduled questioning of nine people as part of the investigation. They are the five suspects and Jiwasraya fund development division head Muhammad Rommy, employee Agustin Widhiastuti, head of pension fund division Anggoro Sri Setiaji and securities company Trimegah Sekuritas institutional equity sales vice president Meitawati Edianingsih.
However, only Harry, Heru and Benny attended for questioning, according to a document obtained by The Jakarta Post.
Both Benny and Heru have been closely linked to the Jiwasraya case as the two businessmen, together with the insurer, were known to have invested their money in the stocks of their own companies, Hanson International and Trada Alam Minera, respectively.
Stocks of Hanson International, trading on the Indonesia Stock Exchange (IDX), plunged almost 55 percent to Rp 50 apiece in the last year, Bloomberg data showed. Stocks of Trada Alam Minera, nosedived more than 72 percent during the same period to Rp 50. Trading in both stocks is currently suspended by the bourse.
The stocks have also been linked to state-owned insurance company Asuransi Sosial Angkatan Bersenjata Republik Indonesia (Asabri), which suffered losses of Rp 10 trillion from plunging stock investments. However, the insurer claimed the situation was only temporary and would not affect its ability to pay out customers' claims.
Previously, an audit by the BPK found that Jiwasraya invested in “low-quality stocks” also known as “pump-and-dump” stocks whose prices were extremely volatile.
Documents obtained by the Post reveal that the company failed to create portfolio guidelines that regulated how it should manage its investments.
As of 2018, the insurer placed 22.4 percent, some Rp 5.7 trillion, of its financial assets in stocks but only 5 percent of this was placed in blue chip stocks. Jiwasraya also placed 59.1 percent, Rp 14.9 trillion, of its investments in mutual funds but only 2 percent of this amount was managed by the country’s top-tier fund managers.
BPK chairman Agung Firman Sampurna told the press on Jan. 8 that he feared Jiwasraya’s case would have a significant impact on the country’s financial system.
“The scale of this case is very big, I would go so far as to say this could be gigantic,” Agung said, expressing his concern that the scandal could snowball like that of Bank Century in 2008.
