JAKARTA - The Corruption Eradication Commission (KPK) recommends that the Financial Services Authority (OJK) and the board of directors of the Regional Development Bank (BPD) make improvements to close the gap for corruption. This request is based on the results of a study conducted in 2024.
"KPK recommends OJK and the President Director of BPD to carry out deepening and/or improvement based on its authority, including audits/investigations related to findings, regulatory improvements to cover weaknesses in lending/financing, and regulation of the scope of discretion," said KPK spokesman Budi Prasetyo to reporters in a written statement quoted Thursday, May 15.
Budi said the recommendations had been submitted directly when the OJK came to the KPK's Red and White building, Kuningan Persada, South Jakarta on Wednesday, May 14. At the meeting, the anti-corruption commission also revealed a number of potential corruption from the studies that had been carried out.
"KPK found that there were six problems indicated by fraud, negligence, and/or regulatory weaknesses in a number of credit or problematic financing at BPD carried out by sampling," he said.
The six fraud problems, first related to lending/problem financing as stated in POJK Number 39/POJK.03/2019. Budi said that side streaming (use of credit/financing is not in accordance with the designation), fictitious debtors, mask debtors to document engineering.
This finding was obtained after the KPK took samples from a number of BPDs in 2013-2023. "With a total value of lending or financing of Rp451.19 billion," he said.
The second fraud problem is that the key credit/financing person is not in the management and/or not the controlling shareholder (PSP) of the company, either directly or indirectly.
Budi said this finding was obtained from three BPDs that were sampled. He said, the KPK found four bad credit distributions during 2013-2020 with a total value of Rp260 billion whose creditworthiness analysis focuses more on the key profile of the company (debtor), although the key person is not the company's management and/or PSP.
This condition resulted in when the key person died, for example, the debtor did not continue the payment.
Third, the KPK found that there was a fraud condition because the payment terms were not received by the bank. In the five BPDs that were sampled, there were 11 lending/financing working capital for collectibility stuck in 2013-2020 with a total value of Rp72 billion.
The bad credit is related to the term of payment for projects/work that is not received by the bank.
This problem usually arises in financing in the construction sector and is caused by three reasons, namely the transfer of the account for receiving project/work payments from BPD accounts to other bank accounts without the knowledge of BPD, the term for payment of projects/work entering the holding account is not blocked/cut by the bank, disbursement of credit/financing far exceeds the progress of the work.
"The fraud in the transfer of payment accounts is suspected to have occurred because the conspiracy between the debtor and the bouwheer (bohir) representative, while the alleged fraud related to the unblocking of the holding account involves BPD officials," explained Budi.
"On the other hand, the disbursement of credit/financing which far exceeds the progress is because some BPD regulations do not require disbursement of facilities based on the progress of the work," he continued.
Fourth, efforts/debtors are not feasible or feasible to finance. In the 5 BPDs that are samples, there are 6 lending/financing working capital with bad collectibility in 2007-2022 worth IDR 224.7 billion and indicated unfit for business/debtor.
This problem, Budi explained, occurred because, among other things, BPD ignored the character of debtors, verification and business validation that were not carried out properly, neglect of risk review and compliance.
Fifth, guarantees for credit/financing are problematic. There are problematic guarantees found in a number of credit/financing distributions worth IDR 234.4 billion throughout 2007-2022 which are stuck.
The forms of problematic guarantees identified, namely the value of guarantees below the value of credit/financing disbursement, guarantees not owned/controlled by debtors, and collateral ownership documents not controlled by BPD.
This condition occurred allegedly because there was no periodic assessment for guarantees and collateral insecurity that was handed over to the bank for debtors/debitors (deputy/management) to have.
Sixth, there is a moral hazard in multi-purpose credit (KMG) payments. There is multipurpose credit/financing distribution in 4 BPDs with a total value of Rp. 20.867 billion to members of the Provincial DPRD for the 2015-2019 and 2019-2024 periods, which are currently congested.
This is due to the reluctance of members of the Provincial DPRD to pay off their obligations, especially when members of the DPRD are affected by interim shifts (PAW).
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PAWs that occur due to party policies (as long as not because of their own wishes or legal problems) have mitigated the risk by replacing insurance, but for PAWs who are outside these criteria (for example resignations due to nominating as heads/deputies) are not guaranteed insurance.
In addition, it was found that some DPRD members did not pay off their obligations even though they were not affected by PAW.
"The BPD is suspected of not aggressively collecting the members of the DPRD because they are members of the Provincial DPRD where the Provincial Government is the controlling shareholder of the BPD," concluded Budi.
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