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Wimboh Santoso: Do Not Get Caught by High Risk Investment
Tuesday, 12 September, 2017 | 18:14 WIB
Wimboh Santoso: Do Not Get Caught by High Risk Investment

TEMPO.CO, Jakarta - Recurring investment fraud has caught the full attention of Wimboh Santoso. The Financial Services Authority (OJK) Chief Commissioner, who has been in the job since July 20, is drafting a strategy to wipe out bogus investment products. He is dispatching teams to villages to help rural residents understand which investments are safe. The OJK is partnering with the National Police for enforcement. "The public still has a low financial literacy which makes them an easy target," he commented. 

With 34 years experience in the financial sector, Wimboh is well-equipped to head the OJK. After heading up the Bank Indonesia representative office in New York, USA, his career hit its stride when he was appointed the executive director of the International Monetary Fund (IMF) in Washington, DC.

His experience as an IMF director, the gatekeeper of global economic stability, led Wimboh to his new post as OJK Chief Commissioner, replacing Muliaman Hadad. Although barely six years old, this institution inherited lots of ‘homework’, issues that could destabilize the financial system. First Travel, the seller of umrah minor pilgrimage tours that resulted in losses of Rp850 billion, is one of the items on his list. 

He is also racing against time to sort out Asuransi Jiwa Bersama Bumiputera’s liquidity problems. This company, Indonesia’s oldest insurer, owes policyholders Rp30 trillion, while its assets are worth just Rp10 trillion. "I am currently trying to find the best way to resolve the AJB Bumiputera issue," he said.

Last Thursday, Wimboh met Tempo reporters Ghoida Rahmah, Raymundus Rikang, and Sapto Yunus at the Radius Prawiro Tower at the Bank Indonesia Complex in Central Jakarta. This is his first interview since taking the helm at the OJK.

Why does investment fraud keep happening?

Basically, it is because the public’s financial literacy is still low, so they are easily cheated. Also, cheaters are everywhere, because human beings are born with an instinct to increase their fortune. Especially, when a con-man can falsely represent an investment. In a Ponzi scheme (a bogus investment where early investors get their profits paid out from the cash put in by subsequent ones), early examples that show good returns won’t continue because they are backed by problems.

How weak is our public’s financial literacy?

Parts of our society do not really have enough understanding of banking or non-banking financial products, such as investing. Others act like speculators. It’s not that they don’t have financial literacy: they only try their luck to make a profit.

What about fraudulent investments concerning religion, such as First Travel?

There are no such investments using that ploy. We have so many institutions holding publics funds, from securities, to the capital market, sharia banks, pension funds, to non-banking financial institutions. The OJK has the authority to issue licenses and to regulate all these bodies. However, there are other fund-holding institutions whose licenses were not issued by the OJK, such as cooperatives, travel agencies, and the technology-based financial system (fintech). Cooperatives are the domain of the Ministry of Cooperatives, while travel bureaus providing hajj and umrah packages must have a license from the Ministry of Religious Affairs. The Ministry or other bodies issuing licenses are the ones that ought to then monitor the license-holders’ compliance.

How come the First Travel package was only frozen after the media blow-up?

If the public suffers a loss from any fund-collecting practices, the OJK is mandated to help. We facilitate through efforts to protect consumers’ rights. I don’t want any more cases like First Travel to occur.

What should OJK do to reduce cases like this? 

OJK’s regional offices have already moved to monitor activities like First Travel. They see that there are more potential ‘First Travels’ out there. I have discussed this with Gen. Tito Karnavian (National Police Chief) and asked him for local police assistance when cases occur. Should we find any such occurrences with severe consequences and that are hard to resolve, I will personally go to the affected region. The public must not be left to be duped into following risky investment practices.

Read the full interview in this week's edition of Tempo English Magazine

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