Former chairman of the Bank Restructuring Agency Syafruddin Arsyad Temenggung, second from right, leaves the Corruption Eradication Commission detention center in Jakarta on Tuesday night. (Antara Photo/Sigid Kurniawan)

Supreme Court Frees Former Bank Restructuring Agency Chief in Long-Running Bailout Graft Case


JULY 09, 2019

Jakarta. The Supreme Court on Tuesday accepted an appeal from Syafruddin Arsyad Temenggung, the former chairman of Indonesia's Bank Restructuring Agency, or BPPN, against a verdict from the anti-graft court and the Jakarta High court to jail him for his involvement in the long-running BLBI bailout fund graft case.

The court thus also ordered Syafruddin's immediate release. He had been given a 15-year jail sentence and ordered to pay a fine of Rp 1 billion ($71,000) by the Jakarta High Court for releasing tycoon Sjamsul Nursalim, the former owner of Bank Dagang Nasional Indonesia, from his obligation to pay back parts of the BLBI bailout fund. 

BLBI stood for Bank Indonesia Liquidity Assistance, which was distributed to commercial banks after the 1998 Asian financial crisis to prevent their collapse. 

The Jakarta High Court had slapped a longer jail sentence on Syafruddin. The lower courts had sentenced him to 13 years in jail. 

In the aftermath of the Asian financial crisis, the government of Indonesia disbursed a total of Rp 144.5 trillion to bail out commercial banks under the BLBI program, which was run by the BPPN, led by Syafruddin. 

The Supreme Audit Agency has since discovered that at least 95 percent of the BLBI bailout fund had been misappropriated.

As BPPN head, Syafruddin issued a letter exonerating Sjamsul from paying back Rp 3.7 trillion of the BLBI fund given to his bank. At the time the bank still owed the government Rp 4.8 trillion.

Sjamsul's bank BDNI received a total of Rp 28.8 trillion in bailout fund from the government, though that failed to prevent the bank from having to shut up shop in 1998.

Sjamsul and his wife Itji have been declared suspects in the BLBI graft case by the Corruption Eradication Commission (KPK). But they have so far refused to appear in questioning sessions scheduled by the antigraft agency. 

The three Supreme Court judges – Salman Luthan, Syamsul Rakan Chaniago and Mohamad Askin – did not achieve a unanimous decision on Tuesday. 

Presiding Judge Salman agreed with the lower courts' verdict, while Judge Syamsul was of the opinion that Syafruddin's case was a matter of civil, not criminal, law. Judge Askin meanwhile said Syafruddin had broken administrative rules.

Syafruddin Freed From KPK Detention

The KPK released Syafruddin from its detention center in Central Jakarta on Tuesday night following the announcement of the Supreme Court's verdict.

"I miss my family," Syafruddin told journalists outside. 

He was quickly escorted away by his legal team.

Investigation Into BLBI Graft Case to Continue

The KPK said its investigation into the BLBI graft case will continue despite Syafruddin's release. 

"KPK will not stop doing everything we can to [uncover] this [BLBI] case," KPK commissioner Saut Situmorang said in Jakarta on Tuesday.

The antigraft agency's recent effort has been focused on trying to recover Rp 4.58 trillion in state losses incurred by the BLBI case, Saut said.

Investigation into the case began in 2013. Syafruddin was declared a suspect four years later.