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Indonesian Bank Stands by Governor

March 14, 2002

JAKARTA, Indonesia (AP) _ Indonesia’s central bank is standing behind Sjahril Sabirin, a bank governor convicted and sentenced to three years in prison for corruption.

Critics said Sabirin ought to resign to protect Bank Indonesia’s credibility.

Sabirin was convicted Wednesday of stealing $80 million in central bank funds in 1999. The money was supposed to have been used to temporarily prop up the privately owned Bank Bali, which was left insolvent by Asia’s economic meltdown in the late 1990s.

Sabirin declared his innocence in what has been dubbed ``Baligate″ and said he would appeal, which allows him to remain free at least until a higher court reviews his case, a process that could take months.

The bank said in a statement Thursday that the bank’s board gave ``full support″ for Sabirin to ``continue to carry out his duties as normal.″

Legislator Benny Pasaribu, chairman of the House commission that picks the central bank head, said Sabirin’s refusal to step down could damage investor confidence.

The court verdict against Sabirin Wednesday was hailed by anti-corruption campaigners, with some saying it could boost President Megawati Sukarnoputri’s anti-corruption credentials.

Under Indonesian law, only Parliament has the authority to dismiss the central bank governor. How this would be achieved currently, however, is unclear because its speaker, Akbar Tandjung, is in detention awaiting trial in a separate corruption case.

Sabirin’s case prompted Indonesia’s international lenders to suspend badly needed loans to the crisis-ridden country. The International Monetary Fund has since resumed its lending program in Indonesia.

The case also cast a shadow over Indonesia’s attempts to win back foreign investors who deserted the country during the Asian financial crisis. Many remain wary of rampant corruption and an absence of legal certainty.

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