The Case of Good Corporate

Good Corporate Governance is basically a system (input, process, output) and a set of
regulations governing the relationship between various stakeholders, especially in the narrow
sense of the relationship between shareholders, the board of commissioners, and the board
of directors for the achievement of company goals. Good Corporate Gorvernance is
incorporated to manage these relationships and prevent significant errors in the company's
strategy and to ensure that errors that occur can be corrected immediately. This
understanding is quoted from the book Good Corporate Governance in manufacturing,
banking and other financial services (2008: 36)

Rogers W 'O Okot Uma of the Common Wealt Secretariat London (Ndraha 2003: 629)
defines Good Governance as, "compressing the process and structure guides political and
social economic relationships, with patricular references to commitment to democratic
values, norms and honest business" or shorten the structural process that regulates
economic, social and political relations with certain references to meet democratic values,
norms and sound business norms.

The BPKP GCG Team defines Good Corporate Governance as a commitment, rules of
the game and practices of conducting business in a healthy and ethical manner.
In the Decree of the Minister of State-Owned Enterprises number: Kep-117 / M-Mbu
/ 2002 regarding the application of Good Corporate Governance practices in State-Owned
Enterprises (SOEs) it is explained that, Corporate Governance is a process and structure used
by SOE organs to enhance success the company's efforts and accountability in order to realize
shareholder value in the long run by taking into account other stakeholders based on
regulations, laws and ethics. From the above understanding, there are several important
things contained in Good Corporate Governance, including:
 1. Effectiveness that comes from the company's culture, ethics, values, systems,
business processes, policies and organizational structure of the company that aims to support
and encourage the development of the company, management of resources and risks more
effectively and efficiently, the company's accountability to shareholders and stakeholders the
other
2. A set of principles, company management policies that are applied for the
realization of company operations that are efficient, effective and profitable in running the
organization and business of the company to achieve strategic goals that meet the principles
of good business practices and their application in accordance with applicable regulations,
care for the environment and based on by high socio-cultural values.
3. A set of regulations and systems that lead to corporate control for the creation of
value added for stakeholders (government, shareholders, company leaders and employees)
and for the company itself.
According to Kartiwa (2004: 7.8) there are two perspectives on Good Corporate
Governance, namely:
a. A perspective that views Corporate Governance as a process and structure used to
direct and manage the business in order to improve business prosperity and corporate
accountability.
b. 2 Another perspective Good Corporate Governance emphasizes the importance of
fulfilling the responsibilities of business entities as business entities in society and
stakeholders.
Sample case :
Bank BNI
A. Brief Profile of Bank BNI
Bank BNI was founded in 1946. This public company is majority owned by the
Government of the Republic of Indonesia. Bank BNI is the third largest bank in Indonesia after
Bank Mandiri and BCA with total assets in 2003 of IDR. 131.49 trillion.
Vision: To be a Bank of national pride that excels in service and performance
Mission: Maximizing stakeholder value by providing financial solutions that focus on
the corporate, commercial and consumer market segments
Corporate Culture
1. BNI is a commercial bank with a public company status.
 2. BNI is oriented towards the market and national development.
3. BNI continuously fosters mutually beneficial relationships with customers and
business partners.
4. BNI recognizes the role and respects the interests of employees.
5. BNI strives for creating a spirit of togetherness so that employees carry out their
duties and obligations professionally.
B. Case Summary
The start of this horrendous case was revealed when BNI conducted an internal audit
in August 2003. From the audit it was found that there was a crazy crazy euro position, worth
52 million euros. The movement of the euro positions in large numbers is suspicious because
the circulation of the euro in Indonesia is limited and the euro's performance was good at the
time. The audit finally revealed that there was a very large L / C opening and the state would
lose more than one trillion rupiah.
The explanation regarding the BNI fictitious L / C is as follows:
· Time of occurrence: July 2002 to August 2003
· Opening Banks: Rosbank Switzerland, Dubai Bank Kenya Ltd., The Wall Street Banking Corp,
and Middle East Bank Kenya Ltd.
· Total L / C Value: USD.166.79 million & EUR 56.77 million or around Rp. 1.7 trillion.
· Beneficiary / L / C recipient: 11 companies under the Gramarindo Group and
· 2 companies under Petindo Group
Export Goods: Quartz Sand and Residual Oil
Export Destinations: Congo and Kenya
Skim: Usance L / C
C. Chronology:
1. Bank BNI Kebayoran Baru Branch received 156 L / Cs with Issuing Bank: Rosbank
Switzerland, Dubai Bank Kenya Ltd., The Wall Street Banking Corp, and Middle East Bank
Kenya Ltd. Because BNI does not yet have a direct correspondent relationship with some of
the banks mentioned above, they use a bank mediator namely American Express Bank and
Standard Chartered Bank.
2. Beneficiary submits an application for a discount on export bills (export credit) for the
above L / C-L / C to BNI and is approved by BNI. Gramarindo Group received Rp. 1.6 trillion
and Petindo Group received Rp. 105 billion.
3. After several bills are due, the Opening Bank cannot pay BNI and the customer cannot
return the export proceeds that have been disbursed previously.
4. After being investigated by the police, it turns out that the export activity had never taken
place.
5. Gramarindo Group has refunded Rp 542 billion, the rest (Rp 1.2 trillion) represents the
potential loss of BNI.
In responding to this case the management of Bank BNI said that there were no fictitious
exports and there were no losses, but there were only potential losses. The question is
whether it is possible for such a loss to occur without fictitious exports? The lack of
information about international trade payment systems through letters of credit (L / C) raises
more and more questions regarding the BNI burglary case.
D. Solution

The system and procedures for securing L / C transactions, especially in state-owned banks,
including BNI, are quite good because they have been built and refined over many years,
partly based on the bitter experience of the past.
However, a good security system is not enough. The attitude of the officers is still needed.
Even though the security system has been so good, but if the bank officers deliberately violate
the system and procedures with a purpose that is not good, the bank will concede too. Banks
are always faced with a dilemma between security and service to customers. Security that is
too tight will result in disappointing customer service. Conversely, services that are felt to be
very satisfying customers will sacrifice the security system. Facing this dilemma, banks must
be wise and able to develop work procedures that can still guarantee security, but satisfying
bank services for customers.

From the research, it turns out that the transaction in the case of Bank BNI is a problematic
transaction with an indication that the transaction was carried out without following the
internal provisions of Bank BNI. L / C transactions of the two business groups that have
become beneficiaries have been negotiated by BNI Kebayoran Baru Bank at a discount
without prior acceptance of the issuing bank. In addition, L / C documents contain
irregularities and L / C negotiations are carried out without the completeness of the
documents.
Based on the results of an investigation conducted by the BNI Bank's large office, exporters,
namely companies including the Gramarindo Group and Petindo Group, have turned out to
be fictitious exports.

This was revealed, among others, from the results of verification to the Belitung Customs
Officials regarding the Gramarindo Group Export Notification (PEB), the Belitung branch of
Customs and Excise Officials stated that the PEB was fake.
Meanwhile also, the settlement of payment for export transactions (proceeds) of some of the
L / C slips that have been negotiated is done not by the L / C opening bank (issuing bank), but
carried out by the exporters themselves by way of depositing or through debiting the
accounts of the the exporter.
As is known, on the report of the BNI Bank's big office on September 30, 2003, the police have
arrested BNI Kebayoran Baru employees involved, namely Koesadiyuwono (former branch
manager of the BNI Bank Kebayoran Baru) and Edi Santoso (former Overseas Customer
Service Manager at the Bank branch BNI Kebayoran Baru).