Indonesia’s Anti-Graft Agency Raids Central Bank Headquarters

Investigation into Alleged Mishandling of Corporate Social Responsibility Programme

Indonesia’s anti-graft agency raided the headquarters of the central bank in Jakarta on Monday in relation to a probe into alleged mishandling of a corporate social responsibility programme, the agency and the central bank said.

The office of central bank Governor Perry Warjiyo was among those raided, two sources familiar with the matter told Reuters. They declined to be named because they were not authorised to speak on the issue.

Bank Indonesia’s spokesperson did not immediately respond to a request for confirmation that Warjiyo’s office was raided.

Anti-Graft Agency Confirms Search

A spokesperson for the anti-graft body confirmed the search took place but did not provide further details.

Central Bank’s Response

The central bank said it respected the investigation and would cooperate with the anti-graft agency.

Background of the Investigation

The agency in September had said it was investigating CSR programmes run by financial regulators in 2023, including the central bank, for potential misuse of funds for personal gain, according to local media.

Warjiyo in September said BI had cooperated with the probe, but defended the governance of its CSR funds.

“We can ensure that CSR or BI’s social programmes have strong regulatory governance and their decision-making process is through stages,” Warjiyo told a press conference at the time.

Central Bank’s CSR Programmes

BI typically donates to education, social empowerment or religious foundations, instead of individuals. The beneficiaries are selected following a survey and must meet a set of requirements, Warjiyo said at the time, adding the board of governors decides on the size of such donations.

The central bank allocated 1.6 trillion rupiah ($99.66 million) in 2023 for social programmes and projects supporting micro-, small- and medium-enterprises, as well as price stabilisation measures, according to BI budget documents provided to parliament. There was no breakdown of or details about the use of the funds.

Raid Timing

The raid happened a day before the central bank starts its two-day policy meeting on Tuesday, with its decision due to be announced on Wednesday. It is expected to keep policy rates unchanged, according to a narrow majority of economists polled by Reuters.

Conclusion

The raid on the central bank’s headquarters is a significant development in the ongoing investigation into alleged mishandling of CSR programmes. The central bank’s cooperation with the anti-graft agency and its commitment to transparency and accountability are crucial in ensuring the integrity of its operations.

FAQs

Q: What is the purpose of the investigation?
A: The investigation is into alleged mishandling of corporate social responsibility programmes by financial regulators, including the central bank.

Q: Who was raided in the investigation?
A: The office of central bank Governor Perry Warjiyo was among those raided.

Q: What is the central bank’s response to the investigation?
A: The central bank has said it respects the investigation and will cooperate with the anti-graft agency.

Q: What is the expected outcome of the investigation?
A: The outcome of the investigation is unclear, but it is expected to provide clarity on the alleged mishandling of CSR programmes.