April Aswadi & Muhamad Al Azhari – President Susilo Bambang Yudhoyono has broken his long silence over the controversy surrounding the Bank Century bailout, saying he had officially entrusted the handling of the case to Vice President Jusuf Kalla.
When the small lender's condition went from bad to worse in mid-October, Yudhoyono was at a G-20 meeting in Washington. The president said that Finance Minister Sri Mulyani Indrawati, who was with him, had informed him of the situation and had said immediate government action was necessary to protect the country's economy.
Yudhoyono said he immediately sent Sri Mulyani back to Jakarta to deal with the problem.
"The vice president was here [in Jakarta]. I gave the order to the vice president to handle the matter, and to the finance minister to save [the economy] from any turbulence," Yudhoyono said during a fast-breaking event on Thursday.
"There was a situation that needed a quick and accurate response," he said, adding that the emergency law on the financial safety net, issued in October, provided a legal basis for the response.
On Sept. 3, State Secretary Hatta Rajasa said Yudhoyono was fully aware that the decision on the Century bailout had been "for the sake of the national economy."
Several days earlier, Kalla, who will end his term on Oct. 20, slammed the Financial System Stability Committee's (KSSK) decision to bail out Century. Kalla also denied having prior knowledge of the bailout, saying he was only informed afterward by Sri Mulyani and Vice President-elect Boediono, who was the governor of Bank Indonesia at the time.
KSSK, concerned that Century's collapse could drag down the entire financial system, on Nov. 21 ordered the Deposit Insurance Agency (LPS) to take over the lender. LPS injected Rp 2.77 trillion (285 million) into the bank on Nov. 23, but in August it came out that a total of Rp 6.76 trillion had been injected into Century, far above the Rp 1.3 trillion ceiling for bank bailouts set by the House.
Kalla has claimed to have told Boediono that since Century was a criminal case, with the bank's owners fleeing with customers' money, he should report it to the police, and that Boediono replied there was no legal basis to arrest the owners.
Dissatisfied with the response, Kalla says he then ordered the National Police chief to arrest the owners "before they escaped."
Yudhoyono vowed not to interfere in the legal proceedings or the ongoing audit investigation by the Supreme Audit Agency (BPK). "Should there have been any crime committed in relation to Bank Century, don't let it go unpunished," he said.