- Police begin questioning BDB, Asiatic officials
Tuesday, April 20, 2004
PC Naommy, The Jakarta Post, Jakarta
Police have started to question three top ranking officials of recently closed banks over their alleged role in a Rp 1.2 trillion (US$139 million) transaction that exceeded the legal lending limit allowed under banking law.
The three are former president director of Bank Dagang Bali(BDB) I Gusti Ngurah Oka Budiana, former president director of Bank Asiatic F.B. Surendro and former fund and marketing director of Bank Asiatic Made Budiana. The two banks are owned by two families related by marriage.
The police have yet to make an official statement on the interrogation process. A high-ranking official within the National Police, who declined to be named, said that the two Asiatic officials would also be detained by the criminal and investigations bureau.
The questioning of F.B. Surendro and Made Budiana started on Monday at 11 a.m. and lasted for more than eight hours, while the interrogation of Oka Budiana began on Friday after police arrested him at his office in Jakarta.
First director of the economic and specific crimes division Brig. Gen. Samuel Ismoko said that the police would charge Oka Budiana under banking legislation.
Separately, Hotman Paris, the lawyer for Tong Muk Keung, Asiatic's majority shareholder, said that his client had already confirmed that he would present himself for questioning on Wednesday.
Hotman questioned the summons, saying that as a nonoperational official, his client was not really involved in daily, operational decision-making.
"The police need to state more precisely the possible involvement of my client in this case, because as a shareholder, Mr. Tong was not an operational official, like directors or commissioners," said Hotman.
Bank Indonesia (BI) spokesman Rusli Simanjuntak said that nonoperational officials still had a strong influence in a case like this.
"There are strong indications that the banks' majority shareholders had a strong influence on the directors' decision-making, especially in granting credit approval for affiliated companies, which later turned out to be fictitious," he said.
Rusli said that during the interrogation, a team from BI would assist the police investigation team with information and supporting documentation.
Included in several of the documents submitted by BI as evidence are the banks' accounting books, copies of transaction documents and notes of meetings.
"The meeting we held with prosecutors and police investigation teams determined that we have sufficient evidence to proceed with the case," said Rusli.
According to BI, the problem centered on a number of alleged lending frauds and legal lending limit infractions committed by the two banks.
BDB placed funds with Asiatic in the form of interbank loans and negotiable certificates of deposit (NCD). The funds were later used as loan collateral by the son of BDB's majority stakeholder, I Gusti Made Oka, who is married to a daughter of Bank Asiatic's owner, Tong Muk Keung.
The amount in loans provided to the son of BDB's owner exceeded the legal lending limit allowed by banking law of only 10 percent of its lending exposure. The loans accounted for 70 percent of the bank's total assets of Rp 1.7 trillion.