Budi Mulya Sentenced to 10 Years Over Bank Century Bailout

Jakarta Globe, Jul 16, 2014

The former deputy governor of the central bank was sentenced to 10 years
on July 16 over his role in the bailout of Bank Century. (Antara Photo)

Jakarta. Budi Mulya, the former deputy governor of Bank Indonesia, was sentenced to 10 years by the Jakarta Anti-Corruption Court on Wednesday over his role in the bailout of the now-defunct Bank Century.

Budi was detained by the Corruption Eradication Commission (KPK) on Nov. 13, 2013 for his part in the Rp 6.7 trillion ($570 million) bailout of the bank in 2008.

He was found to have received a loan of Rp 1 billion from Century owner Robert Tantular just months before the government approved a short-term loan facility to the ailing lender.

“The approval and disbursement of the Rp 689 million FPJP [short-term funding] was an act that was against the law,” presiding judge Afiantara said.

After issuing stop-gap credit to the struggling bank, the bailout later ballooned to more than half a billion dollars. Officials involved in the bailout have maintained consistently that the environment in 2008 was such that allowing an Indonesian lender to go to the wall could have had a systemic impact on the country’s banking sector.

Budi was also told to pay a Rp 500 million fine. Prosecutors had sought 17 years in prison for Budi. They argued the defendant had committed the act while the government had embarked on an anti-corruption campaign, and that he he had tainted the reputation of the country’s central bank.

Budi said he would file an appeal.