Indonesia central bank governor detained over graft case

Business Materials 10 April 2008 15:56 (UTC +04:00)

(dpa) - Indonesia's anti-corruption watchdog on Thursday arrested the governor of the central bank in connection with the misappropriation of some 11 million dollars in bank funds.

After more than five hours of questioning, central bank governor Burhanuddin Abdullah was brought to the detention centre at the national police headquarters in Jakarta, witnesses said.

On January 25, Indonesia's Corruption Eradination Commission, or KPK, named Abdullah a suspect linked to the corruption case. Since then Abdullah has undergone several rounds of questioning.

Along with Abbdullah, the anti-corruption watchdog also named two other Bank Indonesia (BI) officials - Rusli Simanjuntak and Oey Hoey Tiong - suspects, accused of spending about a third of the amount to bribe politicians in 2004.

The remaining money is suspected to have been used to hire lawyers to settle cases against the bank, brought in 2003 and 2004, over funds it handed out during the liquidity crunch of 1998.

Both Simanjuntak and Hoey Tiong have been arrested and held at the detention centre of the national police headquarters.

Muhammad Assegaf, one of Abdullah's defence attorneys, said the central governor's arrest was unnecessary because so far he has been cooperating with the investigation.

Abdullah, 60, whose five-year term as governor ends in May, has denied any wrongdoing.

On Wednesday, the House of Representatives approved Boediono, the coordinating minister for the economy, as the next central bank governor, to replace Abdullah.

The anti-graft agency has the power to make arrests, take over investigations from the police and fast-track sensitive cases.

The KPK has also asked the immigration office to ban some current and former top central bankers from travelling overseas as part of its investigation into the graft case.

Since President Susilo Bambang Yudhoyono's high-profile anti-graft campaign started, officials ranging from governors and former ministers have been jailed on corruption charges.

But some critics also argued the anti-graft campaign has not taken on some powerful vested interests.