Jakarta – The World Bank has questioned the decision by a Jakarta court to acquit the director of a politically linked company accused of involvement in Indonesia's multi-million dollar Bank Bali fraud scandal, reports said Wednesday.
"The World Bank's Jakarta representative called us this morning [Tuesday]. They want clarification and are asking about the legal procedure of the case," the Jakarta Post daily quoted the head of the legal division of the Indonesian Bank Restructuring Agency (IBRA), Pandu Djajanto, as saying. Djajanto said the Bank was questioning the ability of Indonesia's court system to resolve the financial crime, the daily said.
The court's decision, announced on Monday, has already been deplored by the attorney general's office, which is seeking an appeal of an associated administrative court ruling.
The World Bank and the International Monetary Fund (IMF), two of Indonesia's leading donors, have both demanded that Indonesia settle the Bank Bali scandal in a transparent and credible way. Sluggishness in the authorities' handling of the scandal last year prompted a temporary suspension of the flow of aid from the two international financial institutions.
The South Jakarta District Court on Monday acquitted Djoko Tjandra, director of PT Era Giat Prima (EGP), of corruption charges linked to the Bank Bali scandal. Tjandra was charged with "arranging and engaging in illegal transactions," but judges ruled his case should have been heard in a civil rather than criminal court, reports said.
Bank Bali had 904 billion rupiah (121 million dollars) in loans to three banks that were later closed down by the government. Under the terms of the closure, the government took over the banks' obligation and therefore owed Bank Bali the 904 billion rupiah.
Following repeated delays in recovering the debt, Bank Bali accepted an offer from EGP – a company linked to a senior executive of the then ruling Golkar party – to pay Bank Bali 358 billion rupiah (48.4 million dollars) for the right to reclaim the 904 billion rupiah from the government.
EGP later claimed the full 904 billion rupiah from the government, in a case that became politically explosive and drew the first warnings from the IMF that the matter must be speedily prosecuted.
The Bank Bali scandal came to light in June last year and has since deeply rocked the country's already ailing banking sector. A probe conducted by a parliamentary commission on the scandal cited the involvement of several senior government officials and businessmen, including Tjandra and fellow EGP executive and then Golkar treasurer, Setya Novanto. The scandal has undermined public confidence in the government's efforts towards establishing a clean government.