Time for the Supervisors

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Laila Afifa

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  • Jiwasraya's main office in the Harmoni area, Jakarta. TEMPO/Tony Hartawan

    Jiwasraya's main office in the Harmoni area, Jakarta. TEMPO/Tony Hartawan

    TEMPO.CO, JakartaThe Attorney General's Office (AGO) has yet to take action against other perpetratorsin the Asuransi Jiwasraya investment fund scandal. The Financial Services Authority bears most of the responsibility.

    After a year investigating the Asuransi Jiwasraya scandal, the Attorney General's Office (AGO) has not taken serious action against perpetrators within the Financial Services Authority (OJK). Investigators have only detained former head of the Capital Markets Oversight Department Fakhri Hilmi. This is despite the fact that the case that cost the state up to Rp12.1 trillion is believed to have started within the financial undustry oversight body.

    Investigators have gathered substantial evidence. For example, there is the important testimony from the Investment Management Director of the OJK Capital Markets Oversight Department, Sujanto. Questioned by the AGO three times between July and October last year, he consistently said that the agency had detected transgressions in the management of the Jiwasraya investment fund since 2016. This means that the illegal mismanagement of public funds could have been prevented from the outset.

    He also claimed that OJK officials should have acted when they discovered irregular financial transactions that could have resulted in losses to the sate and the public. Sujanto said that since 2016, he has reported breaches of regulations by 13 investment management companies maanging trillions of rupiah of Jiwasraya funds. And an audit by the Supreme Audit Agency revealed a number of irregularities in the management of Jiwasraya investment funds in the 2014 to 2015 book year.

    Unfortunately, the OJK did not take firm action. Instead of punishing the 13 companies, the agency, which was established in 2012, only imposed administrative sanctions on the investment managers. It is fair to suspect that this was a result of lobbying by the former chief executive officer of the Indonesian Stock Exchange of senior OJK officials. Sujanto also admitted that he had been viisted by those former officials. So far, the person reported to be behind all of the suspects in the Jiwasraya case remains free despite his name often being mentioned both in questioning and in court.

    Teh failure to prevent abuses of Jiwasraya investment funds shows the fundamental weakness of the OJK as the finance industry supervisor. Established based on Law No. 21/2011, the OJK should protect the public using its supervisory authority and regulate financial institutions. This is why in the Jiwasraya corruption case, the OJK bears the most responsibility, because its negligence has led to many clients suffering losses.

    It is believed that the failure of this oversight was also seen in the Asabri scandal, which cost the state after the other. Although the role played by the OJK in that case is not completely clear, the methods used resemble to what happened with Jiwasraya: trillions of rupiah of clients funds were invested in 'bogus shares.'

    With this substantial amount of evidence, the attorney general should uncover the role of other senior OJK officials that collaborated with Fakhri Hilmi. The OJK has an e-Monitoring detection system that can be accessed by many officials. It is hoped that the unraveling of this case could be used by the government to evaluate the authority of this financial oversight 'superbody.' Punishing the guilty will restore public trust and revive the investment climate in Indonesia.

    Read the Complete Story in Tempo English Magazine