Jiwasraya Fiasco Reveal Alleged Frauds and Colossal Losses
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19 December 2019 08:33 WIB
TEMPO.CO, Jakarta - The attorney general’s office (AGO) has elevated the investigation status of Asuransi Jiwasraya’s liquidity problems after it has been revealed that the state-owned insurance firm took investments from 13 companies that allegedly violated the principles of good corporate governance from 2018 to 2019.
Due to the series of transactions, Jiwasraya had to face potential state losses of Rp13.7 trillion up to August 2019.
“The potential losses came after there were actions that violated the principles of good corporate governance, which is related to the management of funds collected from the JS saving plan,” said Attorney General ST Burhanuddin at AGO headquarters in South Jakarta on Wednesday.
Burhanuddin explained that the JS saving plan default leading to a failure to pay the policies had been detected by the Supreme Audit Agency (BPK) in a report on the insurance firm’s business insurance management, investments, income, and operational costs from 2014 - 2015.
He said the report showed violations in conducting investments done by Jiwasraya, these took form in conducting high risk investments for high returns. The case in point was when the company went with an investment valued up to Rp5.7 trillion.
That number was divided into 5 percent of funds placed in companies with good performance while the other 95 percent were placed in bad performing stocks. There is also the placement of 59.1 percent mutual funds (Rp14.9 trillion) from financial asset, where 2 percent of it were managed by top tier management while 98 percent of it were managed by poor performing investment managers.
DEWI NURITA