KPK QUESTIONS CENTRAL BANK OFFICIAL IN CENTURY CASE

Jakarta, Jan 29 (ANTARA) - A team of investigators of the Corruption Eradication Commission (KPK) questioned the head of the central bank's bureau of financial system stability over the Century Bank bailout case here on Friday.

"We asked for an explanation from the person concerned with regard to the process of investigation of the Century Bank case," KPK spokesman Johan Budi said.

He said he could not tell in detail about the case as it was still under process of investigation. He also declined to tell about the substance of the questions for Wimboh Santoso, the central bank official concerned.

He said KPK is still investigating the case thoroughly. He said KPK had already questioned several other central bank (BI) officials including the director of bank supervision, Budi Armanto, the deputy director of the bank supervision directorate, Heru Kristiana, and the director of the central bank's directorate of bank research and regulations, Halim Alamsyah.

KPK has also questioned Pahla Santosa from the central bank's directorate of bank supervision and Ahmad Fuad believed to be a central bank official and member of the Bank Century supervision taskforce.

It has also grilled Noor Cahyo, the director of claims and bank resolutions of the Deposit Insurance Agency (LPS) and Ahmad Fuad Rahmany, the chief of the Capital Market and Financial Institution Supervising Agency (Bapepam-LK).

The Century Bank case emerged after BI extended a Short-Term Financing Facility (FPJP) funds worth Rp1 trillion, to meet the request of Bank Century for an asset reposition in October 2008 due to a liquidity problem.

According to the results of audit investigation by the Supreme Audit Board (BPK), BI processed the funds extension as part of the FPJP scheme.

The Century Bank's capital adequacy ratio at the time was 2.35 percent while according to the BI regulation Number 10/26/PBI/2008 a bank had to have a CAR of minimally 8.0 percent to be eligible for the funding.

On November 14, 2008, BI changed the regulation allowing a bank with a positive CAR to apply for the funding. According to BPK although the Century Bank's CAR at the time was below eight percent BI decided to extend the FPJP funds in stages from November 14 to 18, 2008 reaching Rp689 billion to the bank.

In the same month the Century Bank also received funds from the LPS up to Rp6.7 trillion.

The extension of the Rp6.7 trillion followed a meeting of BI's board of governors that declared the Century Bank as a failed bank to cause a systemic effect.

The decision was then reported to the finance minister as the chair of the Financial System Stability Committee (KSSK) through a l letter Number 10/232/GBI dated November 20, 2008.

The KSSK then held a meeting on November 21 starting from 00.11 and which was then followed by a closed-door meeting fro 04.00 am to 06.00 am.

According to BPK the closed-door meeting was attended by then finance minister Sri Mulyani as KSSK chief, Boediono as BI governor and Raden Pardede as KSSK secretary.

The meeting was later followed by a meeting of the Coordination Committee (KK) attended by KSSK chief, BI governor and the LPS board commissioner.

The participants agreed to declare the Century Bank as a failed bank to cause a systemic effect and to bail it out with funds from the LPS.

BPK concluded that BI had not given latest data on the condition of the Century Bank at the time causing the bailout funds to increase from initially Rp632 billion to Rp6.7 trillion.