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Exposing embezzlement at Askrindo

Tempo - March 13, 2021

Jakarta – Askrindo has been undermined by alleged embezzlement totaling up to Rp200 billion. The payment of claims was overstated so the directors could benefit.

There is something amiss with the state-owned enterprises (SOEs) ministry. As the shareholder, it allowed the continuation of clearly corrupt practices at Asuransi Kredit Indonesia, or Askrindo, one of seven government-owned insurance companies.

The alleged offenses were uncovered by Askrindo's board of commissioners. They found that the amount paid to their commission agents had been inflated. In 2019, Askrindo paid Rp195.9 billion to Askrindo Mitra Utama (AMU), one of its subsidiaries. This was far higher than AMU's profits and operational costs of Rp61.38 billion. Managers of the subsidiary then deposited the difference in accounts belonging to two Askrindo directors in the form of US dollars.

With total commission payments of Rp463 billion, there are indications that other funds were also embezzled. Another sum of Rp267 billion was paid to Penas Mitra Utama, an insurance agent managed by retired Askrindo staff. The board of commissioners also found evidence of an agreement stating that from the 15 percent commission obtained by Penas, 13 percent had to be handed over to Askrindo branch offices. The total gratuities received by senior Askrindo staff from the two insurance agents is estimated to be Rp200 billion.

However, the sheer amount of evidence and pile of documents apparently was not enough to spur the SOEs ministry, or Indonesia Finance Group – the SOE insurance holding company – into action. Reports sent by the board of commissioners last November and December elicited no response. It is true that the alleged corruption did not affect clients like in the Jiwasraya case. In the first half of 2020, Askrindo's cashflow remained healthy, with premiums of Rp1.7 trillion and payment of claims at Rp641.2 billion.

Askrindo plays a strategic role in the national economy. Established in 1971, its main responsibility is to guarantee credit paid by the banks to micro, small and medium-sized businesses. In order to increase the capacity of credit loans to these companies, the government injected Rp3 trillion of capital. This was part of the national economic recovery program to revive small businesses during the coronavirus pandemic.

The SOEs ministry should do more to fix this scandal and reform the management of Askrindo. Armed with the board of commissioners' findings, the ministry should report the alleged crimes to the Corruption Eradication Commission.

It should not be difficult to find the people who broke the law in the alleged payments of these gratuities as their methods were simple. Investigating movements of company money that ended up in the pockets of senior staff is clearly easier than looking into, for example, the illegal investments made by senior Askrindo staff and four other individuals in 2011 that resulted in losses of Rp400 billion.

It is very strange that the very opposite has turned out to be true. Two commissioners who from the start were active in investigating the alleged corruption were dismissed only a few hours before the meeting of shareholders in November last year. Following this decision, it is difficult not to conclude that there is something amiss in the SOEs ministry.

Read the Full Interview in Tempo English Magazine: https://magz.tempo.co/read/37631/exposing-embezzlement-at-askrindo

Source: https://en.tempo.co/read/1441784/exposing-embezzlement-at-askrind