Auditors Find $49m in Suspicious Bank Century Withdrawals
Muhamad Al Azhari
The Supreme Audit Agency has discovered that undisclosed parties withdrew more than $49 million from PT Bank Century just after Bank Indonesia provided it with an emergency injection of short-term funds last November, according to a preliminary audit of the bank’s bailout.
According to leaked excerpts of a confidential preliminary report by the audit agency, also known as the BPK, Rp 454.398 billion ($47.2 million) in rupiah deposits was withdrawn from Bank Century while it was being monitored by the central bank, as well as $2.22 million in US dollars and 41,180 Singapore dollars ($29,200).
The report did not identify who made the withdrawals, nor did it reveal the specific dates of the withdrawals.
Earlier reports suggested that state-owned social security provider PT Jamsostek and Boedi Sampoerna of the powerful Sampoerna family had withdrawn money from Bank Century after the State Deposit Insurance Corporation (LPS) cash injection and during the central bank’s surveillance.
Harry Azhar Azis, deputy chairman of the budgetary commission under the House of Representatives, who has read the report, on Wednesday said the emergency liquidity payments had been used in a suspicious manner, and that the BPK’s preliminary report had specifically identified several depositors who had withdrawn funds.
The central bank put Bank Century under special surveillance on Nov. 6, 2008, as the troubled lender struggled to cope with liquidity problems at the height of the global financial crisis. The central bank was unable to stop depositors from withdrawing large amounts of cash from Bank Century as long as its liquidity remained satisfactory.
At that time, the central bank agreed to inject Rp 689.4 billion ($71.7 million) into Bank Century. Bank Century then accessed these funds three times, taking Rp 356.8 billion on Nov. 14, Rp 145.3 billion on Nov. 17 and Rp 187.3 billion on Nov. 18.
These funds were accessed before the LPS took over and began injecting additional funds into Bank Century on Nov. 20.
The report also said that under the central bank’s rules for special supervision, former Bank Century majority owner Robert Tantular, who was recently found guilty of fraud, was able to transfer $96 million in cash from Bank Century’s Surabaya branch office to company headquarters in Jakarta.
The report said that Robert and his wife, Dewi, later used $18 million of these funds to hide Bank Century’s liquidity problems, which were caused by debts incurred by Dewi’s personal business. These funds were later replaced by the central bank’s emergency cash injection, the document said.
Central bank spokesperson Diah Makhijani refused to comment, explaining that the central bank would prefer not to discuss the matter until the final audit has been released. “That way it will be clear where the problems are,” Diah said, adding that no Bank Indonesia officials had read the preliminary report.
The final report on the bailout is now unlikely to be released before the current BPK team finishes its term on Oct. 19.