Jakarta – It is a murky tale which strikes deep at the even murkier heart of Indonesian banking, and heavyweights of international finance warn it could spell ruin for Southeast Asia's shakiest economy.
Ever since it emerged last month that Bank Bali had paid a dubious "commission" of 546 billion rupiah (80 million dollars) to the company of a high-ranking member of the ruling Golkar party, the case has depressed the Jakarta stock market amid allegations of bribery, incriminating diaries and even kidnapping.
This is no ordinary financial scam lightly dismissed in a country where corruption revelations are depressingly frequent.
Newspapers have gleefully followed the case as it has evolved to implicate officials in charge of bank restructuring and even lapped at the doors of the presidential palace.
Executives at the International Monetary Fund and the World Bank, two bodies whose loans are saving Indonesia from financial collapse, are growing irritable at the snail's pace at which the scandal is being investigated.
They warn that by eroding the fragile credibility of Indonesia's financial reform drive it is too serious to go the way of other investigations, such as one into the alleged ill-gotten fortune of former president Suharto which has dragged on for more than a year.
"This scandal has to be cleared up as quickly as possible ... it shouldn't take weeks and weeks, it should take maybe two or three [weeks]," says the IMF's Asia-Pacific director, Hubert Neiss.
In an interview on state television broadcast Saturday, he echoed calls for an open investigation made this week by World Bank country director Mark Baird.
More rigorous transaction controls must be introduced at the Indonesian Bank Restructuring Agency (IBRA), three of whose officials are under police investigation, "as well as in [the central] Bank Indonesia to make a recurrence of such a problem much less likely," Neiss said.
Bank Bali's disgraced former president Rudy Ramli paid the "commission" to a company run by Setya Novanto, who resigned last week as Golkar's deputy treasurer, to ensure it retrieved loans worth some 133 million dollars from three crippled banks which IBRA had shut down.
The huge sweetener was supposedly unnecessary as the state has guaranteed outstanding loans owed by banks being forcibly closed in IBRA's shake-up.
Megawati Sukarnoputri's opposition Indonesian Democracy Party-Struggle (PDIP) alleges it was told by Ramli that he was under pressure to hand over the money to partly bankroll President B.J. Habibie's re-election bid. Habibie and Golkar deny involvement.
Ramli is also meant to have told PDIP investigators that he has written a secret diary containing an explosive blow-by-blow account of the whole deal which could leave a lot of red faces in the corridors of power.
Ramli, however, says he was abducted by a PDIP official and, under pressure to satisfy the party's belief of high-level involvement in the scam, gave a fictitious account which included making up the diary's existence.
Not so, decry angry PDIP lawyers who on Friday filed a police complaint against Ramli and branded him "a big liar."
Novanto has returned the commission to an escrow account, and while some of the case's details may read more like a cheap crime novel than a serious bank fraud, the IMF and World Bank are taking it very seriously.
"I believe, if there was no early and satisfactory resolution, it would be very difficult for us to provide budgetary support to the government of Indonesia," Baird said.
International accountancy firm PricewaterhouseCoopers has been commissioned to audit Bank Bali and, in an unprecedented step, the government has also invited it to examine Bank Indonesia's books.
Bank Indonesia deputy governor Subarjo Joyosumarto acknowledged Saturday that authorities were under pressure to safeguard the country's standing in the eyes of foreign investors.
"It is true that the way in which the Bank Bali case is settled will be a test of whether we are credible enough in resolving such cases," he said.
"And credibility will help restore the economy, so the IMF and the World Bank is naturally interested in having the economic recovery proceed."
A senior official at the National Development Planning Board, Budhy Tjahjati, warned the government to take the IMF and World Bank concerns seriously.
There is "no doubt that multilateral institutions would stop financial support to Indonesia if the resolution to the scandal [is] far from expectation," she was quoted as saying by Saturday's Jakarta Post.