Debtor Death Shines Light on Citibank's 'Questionable' Indonesia Business

on August 17 2011 10:16 AM
Citi
A Citibank branch is seen in Washington Reuters

A debtor's fatal collapse in a Citibank office in Indonesia is just one indication that the company's Asian business may be employing unethical, if not illegal, practices.

With an investigation into the April death of Irzen Octa underway in Jakarta, other Citibank customers are now coming forward claiming that they were robbed, cheated and intimidated by bank employees.

Octa was about $5,700 in debt when he walked into a Citibank office in Jakarta in March. He was then taken into an "interrogation" room set aside for people who owed the bank money, where he died after being "questioned." Police reports vary in their account. Some say that was no evidence of physical violence, while others say that there were blood stains on the floor.

Doctors' reports are equally bleary, one asserting that Octa had a brain hemorrhage, another determining that the man suffered “asphyxiation” and a “strike from a blunt instrument.”

There are no video cameras in the room, but police reviewed surveillance tapes from inside the branch. At one point, Octa walks into the debt collection room, then, about two hours later, is pushed out in a wheelchair. Police suspect that, by this point, he was either unconscious or dead.

“He went into that room in good faith and good health — and ended up dead,” said Esi Ronaldi, Octa's wife, The Washington Post reports. Ronaldi is suing Citibank for 3 trillion rupiah ($350 million) in damages.

The police investigation has revealed a history of questionable practices. Western banks, and especially giant international corporations like Citi, are thought to be held to a higher standard, even when working in foreign countries. But thanks to lax regulations, debt collection often reverts to a Dickensian mode in places like Indonesia.

The practices that led to Octa's death are not uncommon. According to reports, five men showed up at Octa's house in October and demanded their money, choosing to sleep on his porch all night when Octa didn't pay.

Difi Johansyah, a senior official at the Indonesia central bank, told the Washington Post that “there must be something wrong inside Citibank,” insinuating that violence and coercion aren't out of the ordinary.

An 88-year-old Indonesian businessman is currently suing the bank over claims that financial advisers gave him negligent, misleading investment advice. Ie Seng Hoan, who worked in the textile industry, said that Citibank relationship manager Loi Siew Keng tricked him into purchasing hedge funds and accumulators, which ended up losing him money.

Citibank is Indonesia's largest foreign bank, and while the Ie Seng Hoan case is receiving media scrutiny in the country, other reports are confirming unsavory practices. This spring, a bank executive was was arrested for cheating his clients. There is also an ongoing embezzlement investigation concerning an employee who allegedly stole 17 billion rupiah ($2 million) from customers' accounts.

Three men have been arrested for Octa's death.

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