Jakarta – Jiwasraya investments hit a bottleneck in the share's repossession of the Bakrie Group companies. The BPK should not cover up the results of an audit investigation.
The government had better put closure on the Jiwasraya Insurance case, both concerning the legal issues and the matter of a bailout for the state-owned enterprise. On the two matters, the Supreme Audit Agency (BPK) holds a central role: calculating the losses sustained by the state, identifying the alleged individuals involved, and conducting an audit investigation, the results of which will be the reference base for any effort to save Jiwasraya. If the two first mentioned are inaccurate, the following step could very well be a resounding failure.
The process for closure to the Jiwasraya case cannot be looked at piecemeal. The wholesale thievery that went on in Jiwasraya goes back a long way, and by no means only involved the funds from the JS Saving Plan, the insurance product investment scheme sold to the public which is now suffering claim arrears totaling Rp12.4trillion. The case can be traced back to the 2004-2006 period when Jiwasraya wantonly purchased the shares repo of the Bakrie Group of companies worth Rp3 trillion without first conducting any investment analysis.
During the audit process in the Jiwasraya investigation, BPK officers discovered transactions of the shares repo. At the time, Bakrie placed its shares as collateral to Jiwasraya to obtain fresh money. Initially, Jiwasraya only collected the Bakrie Brothers shares in 2006. Later, Jiwasraya is recorded to have also collected shares of other Bakrie Group auxiliary companies, including Bakrie Development, Darma Henwa, Bumi Resources, Bakrie Telecom, and Capitalinc Investment.
Dismayingly, when due date came, the Bakrie group did not redeem the shares they had pawned to Jiwasraya. Problems arose when the performance of all the pawned-off shares crashed at the same time. Jiwasraya was forced to collect the repo shares. Only later were investments put up in the form of repo shares wrapped in offerings of limited money market products.
Even more dismayingly, Tempo unearthed information indicating BPK officers were of two minds during the auditing procedure. Some BPK officers wanted the Bakrie group investment case to be put in as an object for investigation. Two other BPK officials requested the audit period be limited to 2016-2019, meaning, occurrences before that period can be ignored.
This reminds us of the investigation in the Hambalang second phase case in August 2013. The case had resulted in two audit versions. The first version showed up 15 names of members of the House of Representatives (DPR) suspected of involvement. Yet, in the version reported to the DPR, the list of names had disappeared. The two state institutions were in accord when announcing there was only one audit version, the one without the names. Later, in the indictment against Andi Zulkarnain Mallarangeng during the Hambalang case at the corruption court in April 2017, two DPR member names bubbled up who had already been mentioned in the BPK 2013 audit report.
The Jiwasraya audit should not allow a similar repeat of such injudiciousness. The BPK needs to audit Jiwasraya thoroughly so the results can be used by the Attorney General's Office to reveal all the culprits and be made use of by the government in their effort to save Jiwasraya. Without a thorough investigation, some embezzlers can escape, the state will not recover its losses, and the government will be forced to conduct a bailout using state funds.
It would be good if we keep in mind the Century Bank case. The flawed auditing procedure and incomplete bailout by the Central Bank forced the government to conduct another bailout using state funds to the tune of Rp7.9 trillion. Mutiara Bank (Century's new name) in the end was sold at a loss at the price of Rp4.45trillion. It is not impossible a similar situation will occur with Jiwasraya.
If the procedure by the AGO and the BPK is unsatisfactory and carried out in non-transparency, there is one final recourse: the DPR can form a specific checks and balances committee holding special investigating rights to look at this legally scandalous case. Of course, if we recall recent history, a DPR committee with the special investigating rights will be no guarantee nor provide the ideal solution to bring the Jiwasraya melee to closure. In the heat of inter-party tussling, the presence of a special committee with investigative rights could also very easily slide into a transactional free-for-all.
Read the Complete Story in this Week's Edition of Tempo English Magazine: https://magz.tempo.co/read/36467/hanky-panky-audit