The Attorney General\'s Office has named five suspects in a corruption case at PT Asuransi Jiwasraya. The five people consist of former members of Jiwasraya’s board of directors and senior executives of private companies
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The Attorney General\'s Office has named five suspects in a corruption case at PT Asuransi Jiwasraya (Persero). The five people consist of former members of Jiwasraya’s board of directors and senior executives of private companies.
JAKARTA, KOMPAS—Alleged corruption at state insurance company PT Asuransi Jiwasraya, which is estimated to have caused financial losses of Rp 27 trillion (US$1.92 billion) to customers and the state, has begun to unravel.
The Attorney General\'s Office (AGO) arrested on Tuesday five suspects in the corruption case, namely former members of Jiwasraya’s board of directors and senior executives of private companies, who are believed to have enjoyed ill gains from the insurance company.
Reflecting on the Jiwasraya case, the AGO Office has encouraged institutions in charge of supervising financial services to prevent similar cases from happening again in Indonesia in the future. The Jiwasraya case is suspected to be a corporate crime in the form of mismanagement of investment and abuse of authority that took place systematically for years.
The five suspects arrested on Tuesday include former members of Jiwasraya’s board of directors, including former president director Hendrisman Rahim, former finance and investment director Harry Prasetyo, former head of investment and finance Syahmirwan and the president director of PT Hanson Internasional Benny Tjokro, as well as the commissioner of PT Trada Alam Minera, Heru Hidayat.
"Insurance companies should be under close supervision so that such mistakes do not get bigger and cause losses to customers and the state. The total losses reached about Rp 27 trillion,” Attorney General Sanitiar Burhanuddin said.
On Tuesday afternoon, President Joko “Jokowi” Widodo summoned Financial Services Authority (OJK) chairman Wimboh Santoso to the Merdeka Palace. After the meeting, Wimboh refused to answer when asked whether Jiwasraya was discussed at the meeting.
Earlier this month, President Jokowi had asked the OJK and the Indonesia Stock Exchange to crack down on trading fraud in the stock market. The President said he got information that there was rampant trading fraud such as ”pump and dump” trading schemes to artificially inflate share prices. (Kompas.com, 2/1/2020).
Investment
Based on Kompas’ records, at the end of 2018 Jiwasraya lost up to Rp 15.83 trillion. The insurance company faced difficulty covering the losses because the premium incomes received by the company were used to pay claims on policies that were due. The losses occurred because there was financial mismanagement in investment and a number of fraud cases in its investment-linked insurance product called Saving Plan.
The funds raised from the Saving Plan were invested in low-quality stocks and mutual funds that were not in accordance with regulations. On Jan. 8, the Supreme Audit Agency (BPK) allegedly discovered corporate crime in the management of Jiwasraya. Since 2006, the profit posted by Jiwasraya has allegedly been falsified.
The practice allegedly involved the board of directors, managers and other parties outside the company.
The practice allegedly involved the board of directors, managers and other parties outside the company. For example, in 2017, Jiwasraya posted a profit of Rp 2.4 trillion, but the profit was considered false by the BPK because there were fraudulent reserves of Rp 7.7 trillion in the financial statements.
Then in 2018, the loss swelled to Rp 15.83 trillion. The company\'s finances continued to deteriorate and in November 2019, Jiwasraya\'s equity was believed to be negative Rp 27.2 trillion. Burhanuddin hoped that the law enforcement in the Jiwasraya case could have a positive impact on the insurance industry.
The AGO is determined, in addition to returning the money of customers and the state, also to immediately process the case so that the suspects can be taken to court soon. The Attorney General stressed that his office would not rashly arrest someone if there was no solid evidence.
"Of the 13 who were banned from going abroad, we will find who are most responsible. Now, there are five. However, it can increase again. We will see the development, "said Burhanuddin.
The role of the suspect
Burhanuddin said that as president, Hendrisman must be responsible for losses incurred during his 2008-2018 tenure. "Hary Prasetyo and Syahmirwan also have to take full responsibility. Benny and Heru [allegedly] enjoyed the ill gains from the fraud which caused losses to customers and the state," said Burhanuddin.
Separately, the Deputy Attorney General for Special Crimes Adi Toegarisman said the five people were named suspects following the investigation into Jiwasraya\'s alleged corruption. They are accused of violating Article 2 (primary) and Article 3 (secondary ) of Law No. 20/2001 concerning an amendment to Law No. 31/1999 on corruption eradication.
However, Adi refused to explain the detailed role of the five suspects in the case.
However, Adi refused to explain the detailed role of the five suspects in the case. "It is still in the investigation stage. We cannot yet explain their respective roles. This is our strategy. Later when the time comes, it will be disclosed," he said.
Regarding the arrest of the suspects in the Jiwasraya corruption case, the State-Owned Enterprises Ministry said it appreciated the AGO’s initiative. "Decisive and indiscriminate actions are very important to achieve justice while restoring public confidence in the corporation. The investigation is, at the same time, important to support the restructuring of state enterprises for today and the future," SOE Minister Erick Thohir said in a statement sent to Kompas Tuesday night. (HAR/FAI/ERK/LAS/NIA)