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Indonesian vice president testifies in corruption case

Indonesia's vice president testified Friday at the trial of a former official accused over a controversial bank bailout, renewing attention on a case that rocked the government just weeks before elections.

JAKARTA: Indonesia's vice president testified Friday at the trial of a former official accused over a controversial bank bailout, renewing attention on a case that rocked the government just weeks before elections.

Prosecutors allege that the 6.76 trillion rupiah ($590 million) used to bail out Bank Century in 2008 was far too high, and that some of the money was siphoned off by well-connected depositors.

There have been claims that some was redirected to President Susilo Bambang Yudhoyono's party, and Vice President Boediono, who was central bank governor at the time, has also been implicated for authorising the move.

The president vehemently denies any wrongdoing over the bailout of the bank, which has been renamed Bank Mutiara.

The trial of then central bank deputy governor, Budi Mulya, charged with malfeasance over the bailout, comes ahead of July presidential elections, with Yudhoyono's party already deeply unpopular and struggling to find a successor.

His ruling Democratic Party saw its support fall by half to around 10 per cent at legislative elections last month.

Giving evidence as a prosecution witness on Friday, Boediono defended the decision to bail out the lender, taken at the onset of the financial crisis, saying the situation had been one of "dire emergency".

"It seemed that at the time Bank Century would collapse and there would be a domino effect on other banks," he said.

Boediono said the decision was taken because there were fears of a a repeat of the Asian financial crisis in the late 1990s, which devastated the Indonesian economy and precipitated the downfall of long-ruling dictator Suharto.

Mulya's indictment also alleges that the vice president had a hand in committing the crime although anti-corruption authorities have not named him a suspect over the case.

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