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Big Losses in SNP Scandal : A Reflection of Ethics

Meet Our Team

Bobby Mandala Putra Fadila Pratika HS Abdul Karim Soleh


29318304 29318445 29318443


01 Background

02 Timeline & Case Identification

03 Ethics Analysis

04 Conclusion & Quotes

 Case Description
 SNP Finance
 Deloitte Indonesia
Case Description - 1
In September 2018, Directors and managers of PT Sunprima Nusantara Pembiayaan (SNP Finance) were secured by the
authorities regarding cases of alleged criminal acts of document falsification, fraud and money laundering in their business activities
as finance companies (multi).
SNP Finance is part of the Columbia business, a retail network that offers purchases of household goods on credit or installments.
In its activities, SNP supports the purchase of goods made by Columbia with funding sources from banks or debt securities
In the multi-finance industry, SNP Finance is arguably a middle to lower class player. Total funding disbursed is no more than IDR 5
trillion per year. The items he financed were only mattresses, cabinets, sofas, and other household furniture. Not surprisingly, the
financing that they channel always ranges from tens of trillions per year. Naturally, SNP Finance's profession friends are in
business at a commercial bank
SNP Finance is known to receive working capital credit facilities from 14 banks. One of the largest comes from PT Bank Mandiri
(Persero) Tbk. SNP Finance has been a customer of Bank Mandiri for 20 years. However, in 2016, the company submitted a credit

At that time, Bank Mandiri included SNP Finance in the collectability group 2 (kol 2) or in special attention. Credit restructuring is
needed not because the company is in arrears in payments, in order for the company can get funding from other banks.
Instead of improving, the SNP Finance actually showed bad faith. In the past few months, the credit has started to stall and the
company's management filed for bankruptcy voluntarily. In fact, the bad credit at that time reached Rp1.2 trillion.
Case Description - 2
Delay of Obligation to Pay Debt (PKPU) was published on May 4, 2018, after being granted a panel of judges from the Central
Jakarta District Court. In PKPU, the total SNP Finance bills reached Rp4.07 trillion from 14 banks as creditors with a guarantee of
Rp.2.2 trillion, and 336 MTN holders worth Rp1.85 trillion
In December 2017, according to the Bank Indonesia Debitor Information System (SID) the SNP Finance category was actually still
in Kol 1 with a smooth status. But, in January 2018, there was a transition and under the control of the OJK, namely the Financial
Information Service System (SLIK), which then changed its status to Kol. 2. This has an impact on the emergence of questions
from banks that disburse their funds to SNP Finance and lead to a drag on the flow of credit from other banks. On the other hand,
the billing management system in SNP Finance branch offices is getting weaker.

The disclosure of this case originated from Bank Panin's report in early August 2018. SNP Finance submitted a loan for working
capital credit and checking accounts to Bank Panin for the period of May 2016 to 2017 with a ceiling to debtors of Rp.425 billion.
One of the actions taken by SNP Finance to overcome its bad credit was to issue bonds in the form of Medium Term Notes (MTN),
which are rated by Pefindo, a rating agency, based on financial statements audited by KAP DeLoitte.
It can be said that the issuance of MTN is not through the process at OJK, considering MTN is a private agreement, but requires a
rating because it can be traded. Quoting Pefindo's press release, the independent credit bureau won SNP Finance with idA- rank
(single A minus) since December 2015-November 2017. Then, the ranking was raised to idA (single A) in March 2018. Two months
later, in May 2018, the OJK issued sanctions for freezing business activities (PKU) against SNP Finance through a letter of Deputy
Commissioner of Supervisory IKNB II Number S-247 / NB.2 / 2018. Pefindo has also hastily placed an idCCC rating (triple C) or
negative credit watch before finally withdrawing ratings against SNP Finance.
Case Description - 3
With the enactment of PKU, SNP Finance is prohibited from conducting financing business activities. If absent from that, the OJK
can immediately impose sanctions for revoking business licenses. Not only that, during the PKU sanction period, SNP Finance is
also required to submit and take corrective actions. "Within a period of 6 months since PKU, SNP Finance did not fulfill these
actions, it could be subject to sanctions for revoking business licenses," he added. With this condition, Anto added, OJK will
continue to monitor the progress of the SNP Finance case, as well as monitor the bank's internal audit team conducting internal
investigations and will provide sanctions if there are bank employees involved. OJK will continue to coordinate with relevant
agencies, such as the Police and the Ministry of Finance for the necessary action. The OJK also prohibits the issuance of MTN
without the permission of the OJK and prepares steps for coordination with the Ministry of Finance related to the work of the Public
Accountant Office
The Ministry of Finance calls two public accountants who audit SNP Finance's financial statements, namely the Marlinna Public
Accountants and Merliyana Syamsul violating professional audit standards. Citing official data from the Center for Financial
Professional Development (PPPK), in auditing SNP Finance for the financial year 2012-2016, they have not fully implemented
information system controls related to customer data and the accuracy of journal financing receivables.
The public accountant also has not implemented the acquisition of sufficient and appropriate audit evidence on the accounts of
consumer financing receivables and implemented adequate procedures related to the fraud risk detection process, as well as
responses to fraud risk.
SNP Finance
PT. SunPrima Nusantara Pembiayaan

Sunprima Nusantara Financing often abbreviated as SNP is a finance company that was established in 2000, had vacated for
2 years and then Columbia Group took ownership in 2002, but PT. NSP only fully operated in 2004. SNP mainly engages in the
consumer sector finance called Prima Finance, and the main dealer that funded by PT. SNP’s are all Columbia Retail consumers.

The products financed are all household needs, such as all electronic products, furniture, hand phones, computers, two-wheeled
motorcycles. In addition to these products, PT. SNP also provides financing for productive products such as hand tractors and 3-w
heeled motorcycles.

Principals that work together with PT. SNP such as, Nozomi, Yanmar, Olympic, Modena, Fujitec Sanken and Jakarta music
gallery. In addition to financing all Columbia PT.SNP outlets also finance other dealers, both traditional markets and modern
markets, through the Prima Finance division. Columbia Group is currently operated in 72 cities, and 10 cities through the Prima
Finance division.
Deloitte Indonesia
Kantor Akuntan Publik (KAP) Satrio Bing, Eny & Rekan, Akuntan Publik Merliyana Syamsul

Kantor Akuntan Publik (KAP) Satrio Bing, Eny & Rekan (SBE) member firm of Deloitte Touche Tohmatsu Limited give assurance
service to financial statement. Assurance service is an independent professional service, typically provided by Chartered or
Certified Public Accountants or Chartered Certified Accountants, with the goal of improving information or the context of
information so the decision makers can be informed, and presumably better decisions. Assurance services provide independent
and professional opinions that reduce information risk (risk from incorrect information).

Satrio Bing, Eny & Rekan made general audit for financial statement PT Sunprima Nusantara Pembiaya (PT SNP). SBE last
time released independence auditor report for the year ended 2016 with opinion unqualified. (CNBC Indonesia)

Auditor responsibility is to express an opinion on the financial statement and conducted audit in accordance with Standards on
Auditing established by the Indonesian institute of Certified Public Accountants. Those standards require that the Auditor comply
with ethical requirements and plan and perform the Audit to obtain reasonable assurance about the financial statement are free
from material misstatement.
Timeline & Identification
Case Identification
Manipulated 14 Banks in Indonesia

• SNP manipulated 14 banks in Indonesia with total losses IDR 4,07 Trillion by increasing amount in their
Account Receivables (Piutang) and doing double pledge. SNP later declared bankrupt for not being able
to pay Liabilities.

Investors Losses from Mid Term Notes (MTN)

• SNP manipulated financial report in order to get good rating from Pefindo in order to release MTN series
and get funding from Investor, which later when the MTN become maturity SNP can’t pay the Investors

Punishment for Deloitte Indonesia from Regulator (OJK)

• SNP manipulated data that being audited by Deloitte in 2017 and also using 2016 audited financial
report with unqualified opinion in order to get loan from 14 banks and release MTN, without notification
to Deloitte. Later on OJK release a Press Release to give sanctions to Deloitte Indonesia.
Case Timeline

2016 - 2017 Dec 2017 Jan 2018 March 2018 May 2018 Sept 2018 Oct 2018

SNP Finance get Collectibility PKPU release debt Panin Bank
Status is Kol 2 PT.SNP release 26 Oct 2018, Judge
IDR 425 Billion loan Status is Kol 1 report of SNP : IDR reported PT.SNP to
according to Mid Term Notes seri of the Commercial
for working capital according to 4,07 Trillion from 14 Bareskrim related to
Sistem Layanan A and seri B with Court declared
credit and checking Sistem Informasi banks and IDR 1,85 bad debt with total
Informasi principal fund IDR PT.SNP bankrupt
account from Panin Debitur (SDI) Trillion from 336 amount IDR 450
Keuangan (SLIK) 150 Billion.
Bank Central Bank MTN Billion
Medium Term Notes

Medium Term Notes (MTN) is debt note that usually matures (is paid back) in 5–10 years, but the term may be less than one year
or as long as 100 years.[1] They can be issued on a fixed or floating coupon basis. Floating rate medium-term notes can be as
simple as paying the holder a coupon linked to Euribor +/- basis points or can be more complex structured notes linked, for
example, to swap rates, treasuries, indices, etc. When they are issued to investors outside the US, they are called "Euro Medium
Term Notes" (EMTN). Issuance of MTNs to investors based in the US requires a separate US MTN program. MTNs can be issued
with a fixed maturity date (noncallable) or can be issued with embedded call or put options and triggers where the notes will
redeem early based on certain parameters. MTNs are most commonly issued as senior, unsecured debt of investment grade
credit rated entities which have fixed rates. MTNs offer more flexibility to the issuer and investor both in terms of structure and
Medium Term Notes - SNP

Total lost from 336

IDR 1,85 Trilion
Ethical Analysis
Ethical Analysis Workbook - 1
Key Likely Consequences Ethical Standards

Positiv Negative Duties Rights Best Practice Commitment

SNP Finance - • Company’s reputation d Settle Liabilities to - • Restructurisation liabiliti Settle Liabilities to
ecreasing creditor and investor es by extending the ten creditor and invest
• Company suffered a los or or
s • SNP should sell the as
set to pay the liabilities

Deloitte - • Company’s reputation d Provide opinions for Give the clarificati • Should comply with ethi Obtain the reasona
ecreasing financial statements on cal requirement ble assurance abo
• Prohibition to audit certa about Delliotte rul ut the financial stat
in industries e in ement are free fro
this case m material misstat
Ethical Analysis Workbook - 2
Key Likely Consequences Ethical Standards

Positive Negative Duties Rights Best Practice Commitment

Investor (MTN) • Worsen the invest • Ensure the cas • Investment bein • like it or not must le -
ment climate in Ind e been treated g paid arn to read financial
onesia and solved statement
• loss of trust in finan • Ensure the investm
cial services ent product should b
e approved from O
Creditor (Bank) • Company suffered • provide loans in • Get the paymen • Bank should do bac
a loss accordance wit t from debitor kground checking a
• Decrease profit for h company reg nd financial report v
the year ulations alidation before issu
Ethics Principles Analysis - 1
Principles PT SNP Analysis

Fiduciary Manipulate the list of customer in the account r

Act in the best interest of the eceivables and mark up the amount
company and its investor

Dignity A lie to Auditor, Investor, Creditor and rating co Profession doubt to Auditor, rating co
Respect dignity of all people mpany mpany.

Property Not ethical conduct from CEO, Operational Dir The ethical conduct manipulate the d
Respect property and the right of ector, Finance Director, Accounting Manager a ata has consequence that is the com
those who own it nd Assistant Manager pany become bankruptcy
Ethics Principles Analysis - 2
Principles PT SNP Analysis

Transparency • Falsify financial statements and provide f • The company did not provide the truth
alse data to the audit and provide fictitiou in financial statements in order to have
s receivables to banks funding from the creditor
• CEO of the companies bankrupt themsel • CEO try to to avoid liability

Reliability Fraud to the banks • Breach the company commitment to the

creditor that did not provide actual data
and manipulate it used for the company'
s own interests
• Reduce efforts to deepen the Indonesia
n market

Fairness Falsify accounts receivable from customers a • The company did not provide the truth in
nd investors financial statements
• The level of public trust in the financial in
dustry declined
Ethics Principles Analysis - 3
Principles PT SNP Analysis

Citizenship • Manipulate receivables account amount to g Ethics and regulation are not well impl
Respect for Law and Regulation et funding from bank and MTN emented in running the business
• Release MTN without registering to OJK

Responsiveness SNP is not acting responsible for all the losses, SNP is not act with good intention in r
Responding to complaints and sugg and taking easy way by declare bankrupt. unning the business.
Conclusion & Quotes
Basically SNP Finance has made a mistake that is detrimental to the Bank as the
creditor and the investor itself. But some things can be a lesson, as follows.

Like bank loans that are stalled, the debt can actually be restructured by extending
the interest payment tenor. This option is the most strategic to implement for this

This case is also a warning to the government, especially the OJK, to immediately
encourage finance companies to conduct mergers or acquisitions. This is important
to do in order to reduce the number of finance companies while at the same time
simplifying supervision. The fewer multi, the more effective for the OJK to oversee
the multi. In addition, OJK is required to carry out socialization and education about
investment, both in terms of benefits and potential losses. This aims to raise the
level of financial literacy of investors.

The government can also form investor protection institutions in the capital market
as well as the Deposit Insurance Corporation (LPS) which guarantees deposits in
the national banking industry. So that the interests of investors are protected. That
protection will make the capital market more excited in the future
Financial and Accounting is about reconciliation, please ensure the data is reconcil
e with another data.

Good business means Good Ethics, make good business and not manipulate the

Strict regulation from the Authority and update the regulation, many gaps from the
regulation can be utilized by bad personnel to make a fraud. Strict regulation and u
pdated regulation needed to prevent the fraud.

Skepticism and Circumspection from Auditor, Creditor and Investor


"We have coordinated with the OJK "They are actually Bank Mandiri's old debtors,
regarding the performance and role of the they have been Mandiri customers for 20 years.
examines in the SNP case from the Ministry But suddenly this year they have bad intentions,
of Finane. Because we are overseeing from such as jamming payments, bankrupting
the public accountant's side, we together wit themselves and seeing their intentions badly,"
h OJK will coordinate what steps will be said Bank Mandiri Corporate Secretary Rohan
taken," Sri Mulyani said in Jakarta, Hafas from Jakarta on Wednesday , September
Thursday ( 9/27) 26, 2018
Thank you