Whistle-Blowers Take Citibank to Court in Fraudulent Loans Case

Jakarta Globe, Nov 10, 2014

Whistle-blowers allege that Citibank Indonesia approved loans to consumers
based on fraudulent applications. (Reuters Photo/Yuriko Nakao)

Jakarta. Four Citibank Indonesia employees are suing the company for wrongful dismissal after they blew the whistle on the bank issuing high loans on the basis of alleged tax fraud.

Jhonry Gultom, a lawyer for the four, told Antara on Monday that they reported the allegation in order “to fix the system, but were instead suspended and are now in the process of being fired.”

The case dates back to June 2013, when the employees, described by Jhonry as “senior managers,” reportedly discovered that marketing staff at the bank were conspiring with loan applicants to manipulate the latter’s tax statements so that they would be approved for high-value loans at low interest rates.

A Citibank sales official, speaking on condition of anonymity, said separately that this was a common practice, given that the staff earned a commission pegged to the value of the loan approved.

“The bigger the loan approved by Citibank, the bigger our incentive or bonus,” the official said.

Jhonry said that one of his clients, none of whom have been named, reported the practice to their supervisor, but was transferred to another post following an internal investigation. He said the bank proceeded to target three other employees, and in July last year suspended all four whistle-blowers “without giving them the right to explain or defend themselves.”

A spokesman for the bank declined to comment in detail on the case, confirming only that there was a labor dispute currently being heard at the industrial relations court in Jakarta.

“We’re sure the judges will be able to see the case comprehensively,” said Agung Laksamana, Citibank Indonesia’s head of group communications.

“We need to emphasize that Citibank uphold integrity very highly,” Agung added. “[There is] no tolerance for any Citibank employees who violate procedures or the code of conduct.”

The Jakarta administration says it deplores the suspension and pending dismissal of the employees.

“We have issued a recommendation to Citibank not to dismiss them,” said Dwi Untoro, the head of the South Jakarta Manpower Office. “We issued the recommendation after meeting with the four employees and Citibank’s lawyer.”

He added that under the 2003 Manpower Law, the bank could only dismiss them after issuing them three warning letters each. It is not clear how many warning letters, if any, the bank issued to the employees, who worked at the bank for between four and 10 years.