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Indonesia Bank Bali Probe Too Slow

August 29, 1999

SINGAPORE (AP) _ An investigation into a corruption scandal at Indonesia’s Bank Bali is progressing too slowly and will be extended to the country’s central bank, a senior World Bank official said Sunday.

Indonesian authorities have given PriceWaterhouseCoopers the go-ahead to audit Bank Indonesia, the country’s central bank,

``The government auditing body has given PriceWaterhouseCoopers the mandate to investigate″ Bank Indonesia, the country’s central bank, said Jean-Michel Severino, the World Bank’s vice president for East Asia and the Pacific.

Official investigations have so far been ``too slow _ that is why the pressure has increased,″ Severino said on the sidelines of a conference in Singapore.

The scandal broke last month after an audit found that Bank Bali’s directors had used government bailout money to pay a $80 million fee to a debt collection company controlled by the ruling Golkar Party’s deputy treasurer.

Golkar opponents allege the money _ which has since been returned _ was intended to bankroll Indonesian President B.J. Habibie’s campaign to remain in power when an electoral college selects the next head of state in November.

The disclosure of the affair caused an uproar, unnerving investors in the currency and equity markets for weeks.

The World Bank earlier threatened to halt funding for Indonesia if it doesn’t swiftly and satisfactorily conclude an investigation.

Last week, the IMF called for an audit of the central bank to ascertain how the funds were lost.

Bank Indonesia’s Deputy Gov. Miranda Goltom said that the government is fully aware of the concerns shown by the international agencies regarding the investigation and will do anything within the law to ensure the investigation is fair and transparent.

Habibie’s government will make a statement on the progress of the investigation in Parliament Sept. 4, said Severino, who was in Singapore for a 14-nation ``Manila Framework″ conference of finance and central bank officials.

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