Group 9

Alfattah Abdillah 361153

Jeihan Vianni S 375483
Antonius Budi K 375498
Forensic Accounting and Fraud Investigation
Century Case

Chronology
The century case started before it was even existed. Back in 1989, a bank called the Bank
CIC (Century Intervest Corporation) was created by Robert Tantular. This bank failed its
rights issue on its first time in March 1999, which BI (Bank Indonesia) stated, and Robert
Tantular was failed on his Fit and Proper Test which proved him incompetent to operate the
bank. In 2004, the CIC was merged with Bank Danpac, and Bank Pikko to Bank Century. In
2008, Bank Century’s client demanded a big withdrawal, and thus drained all of their cash.
Knowing that it’s hard for the bank to liquidate their other influential customers who
deposited large amount of money, so the management swayed them to be their stock owners
instead of withdrawing all of their money. November 2008, BI (Bank Indonesia) declared
that Bank Century does not have enough liquidity to pay off their customers. Bank Century
gather their hard cash from various branches to the headquarter in Jakarta. Turns out that
Bank Century needs Rp 632 Billion in order to be a healthy bank again (Capital Adequacy
Ratio at 8%). Further investigation proved that Bank Century’s Capital Adequacy Ratio
(CAR) to be negative 3.53%. By the end of November 2008, The Board of Commissioner of
the Deposit Insurance Agency determined the total capital that Bank Century need to boost
their CAR from negative 3.53% to 8% was Rp 2.6 trillion. It was later decided that it went up
to Rp 2.77 trillion due to the facts that of their assets are bad assets. The next day, the head of
KSSK, who happened to be the head of ministry of finance, questioned BI’s assessment on
Bank Century. Not only that, BI’s judgement and their policies are also very questionable.
Another fact is that, the amount of capital that was originally supposed to be just Rp 632
million, jumped through the skies until it reached Rp. 6.7 Trillion by the end of July 2009.
This, of course, was based on BI’s assessments. On 10th September 2009, Robert Tantular
was arrested and a fine of Rp 50 Billion due to the verdict of manipulating the influential
banks for avoiding the Law regarding Banking (UU Nomor 10 Tahun 1998)

Aftermath
● Bank Indonesia issued new regulation, Peraturan Bank Indonesia Nomor 14/ 8
/PBI/2012 tanggal 13 Juli 2012 about the Bank Stock Ownership, which regulated the
maximum bank stock ownership.
● Minister of Finance, Sri Mulyani resigned from her position.
● OJK was established to supersede Bapepam-LK, OJK is similar to Bapepam-LK.
However, OJK has different structure. OJK has Directorate on the top management to
oversight the performance, and OJK added a new division which was the Transaction
Effect and Effect Institution Oversight Directorate. The new division had more jobs
than before.

Analysis
In any kind of fraud, there will always be three elements that are present. Firstly, pressures
that we can think of given the information is that the financial pressures that the perpetrators
have, either the greed and also they wanted to live beyond their current socioeconomics
levels. Secondly, the opportunities which was present on the case journey was the lacking
internal control of Bank Indonesia. This is shown by how do Bank Indonesia could make
wrong calculation for the bailout amount. It was either someone inside Bank Indonesia
manipulate it or someone inside Bank Indonesia manipulate the data. The culture or moral
also play a part in this case, because if the judgment of BI is questionable, means that they
might also be included in the fraud and that they are purposely do the misjudgment. Lastly,
For the element of rationalization, we cannot think of the possible rationalization as there is
only limited information. Although three elements are present, there is only element that
becomes the true major cause of the fraud. In this case, we think that the major cause of the
fraud is opportunity, because if the internal control and environment of BI is strong and
adequate enough, the perpetrator will not even think to commit the fraud, and the person
inside BI that might be involved in the fraud will not be tempted to participate in the fraud.

References:
Findings on Audit Investigative held by the Indonesia Supreme Audit (BPK) as disclosed by
INILAH.COM Jakarta, 2009.
"Kronologi Aliran Rp 6,7 Triliun Ke Bank Century". 2017. Tempo News.
https://m.tempo.co/read/news/2009/11/14/063208353/kronologi-aliran-rp-6-7-triliun-ke-
bank-century.
Bank Indonesia Website