TANGERANG, Indonesia — Irzen Octa, a down-on-his-luck Indonesian businessman, suffered a torment familiar to millions of Americans struggling with debts racked up in better times: He feared losing his home.
In the end, he managed to keep the ramshackle two-story house where he and his wife raised their two now-teenage daughters. Instead, Octa, pursued by Citibank over a $5,700 debt on his platinum credit card, lost his life.
The 50-year-old businessman, invited to a Citibank office in Jakarta in late March, collapsed in a tiny room set aside by the U.S. bank for questioning of deadbeat debtors. He died shortly afterward — a casualty of a “harsh interrogation,” said Jakarta police spokesman Baharudin Djafar.
Citibank, Indonesia’s biggest foreign bank, said its internal investigation found no evidence of physical violence.
The tragedy — which came just days after police arrested a Citibank executive in a separate scandal over swindled clients — has tarnished the image of an American icon in the world’s most populous Muslim nation. It also cast a spotlight on a dark corner of international banking — the outsourcing of debt collection to unregulated agents in booming but unruly emerging markets.
The interview room where Octa met Citibank’s debt agents was sealed with yellow tape; police declared it a crime scene. Five people, none of them Citibank employees, have been arrested on suspicion of “group violence” and “mistreatment resulting in death.”
The Indonesian parliament and media have howled in protest at the arm’s-length use of outside debt collectors.
Tigor Siahaan, Citibank’s new boss in Indonesia, said the bank does not “condone, encourage or practice violence, or even harsh language.” Octa, he added, “could have died of natural causes.”
The dead man’s widow blames the bank. “He went into that room in good faith and good health — and ended up dead,” said Esi Ronaldi, who is suing Citibank for $350 million in damages.
At the family home in Tangerang, 20 miles from Jakarta, Ronaldi’s late husband looks down from a red-framed photo on the wall, near a sideboard decorated with a gift from Citibank, presented before Octa stopped paying his bills: a teddy bear with the bank’s logo.
Malinda Dee, the glamorous Citibank banker arrested shortly before Octa’s death, has become a tabloid sensation in the meantime. The two-decade Citibank employee worked as a senior relations manager, cultivating wealthy Indonesian clients from whom she is accused of stealing.
With one customer dead, others complaining that they have been robbed and photos of Dee plastered across the news media and on the Web, the giant U.S. bank is scrambling to contain a public relations debacle — and convince clients, local politicians and Indonesia’s central bank that it has just been unlucky.
Savaged in parliament and in the press, the American bank at first remained largely silent in the face of increasingly ghoulish allegations, but in May it sent Citigroup Vice Chairman Lewis B. Kaden to Jakarta to offer assurances that both scandals “are being treated with the utmost seriousness by our senior management.”
The bank, Kaden said in a statement, is “deeply saddened” by Octa’s “sudden and unexpected death” and is eager to “handle this very sad matter with genuine compassion. . . . If we have done anything to suggest otherwise, we sincerely apologize.”
A review of Citibank’s affairs by the Indonesian central bank found that contracts with debt collectors fudged what is supposed to be a mandatory principle: that banks bear ultimate responsibility for the actions of the collection agents they hire.
“There must be something wrong inside Citibank,” said Difi Johansyah, a senior official at the central bank, which supervises banks but not their outsourced agents.
Citibank has said that it is “having discussions” with the central bank about the terms under which it hired debt collectors. Sihaan, Citibank’s Jakarta chief, said that the bank’s image had “taken a hit” but that the bank still managed to increase its client base; three months after the twin scandals broke, it was up 1 percent in Indonesia.
Citibank, a big loser in the collapse of the U.S. housing bubble, has pushed hard since the 2008 financial meltdown and a huge federal bailout to boost profits overseas, particularly in booming Asia.
Opening a new branch in the Indonesian capital last year, Shariq Mukhtar, Citibank’s then-boss in Jakarta, gushed about the “privileges and extraordinary experiences” offered to customers: “We want to be there for them every step of the way.”
But Citibank, like other big foreign banks, stepped aside when it came to getting customers such as Octa — who stopped paying his credit card bill three years ago — to cough up.
Noting that Indonesian debt collectors have a reputation for sometimes aggressive persistence, Johansyah, the central bank official, said: “The best thing to do is just pay.”
Octa’s widow said she first discovered that her husband had money problems when five men showed up uninvited at their Tangerang home one night in October and said they had come to get money. Unable to collect, they slept on a terrace outside the front door.
In the following months, debt collectors kept calling — and Octa’s debts kept rising because of hefty interest. At the end, his debt to Citibank stood at more than $11,000, including financial charges — twice the original amount — but the bank says it was willing to settle for much less. He owed others money, too, and told his family members that they might have to sell their house.
“Wish me luck,” he apparently told his wife before leaving home March 28. “I may be signing a new contract and can settle our debts.” He set off about 6 a.m. on his motorcycle, driving first to a school to drop off his younger daughter and then heading to Jakarta. He had a “very happy face,” his widow recalled.
In the afternoon, a friend of her husband, Tubagus Surya, telephoned from a Citibank office in south Jakarta and told Ronaldi that her husband had “gone.” Surya, who arrived at the Citibank office soon after his friend collapsed, said in a telephone interview that he found Octa sprawled on the floor with his nose bleeding and bruises on his head and abdomen.
“He was clearly not interviewed but tortured,” said the friend, who had worked closely with Octa at the National Unity Party, a small political party that the dead businessman had headed.
Citibank, denying any use of physical force, noted that its interview room, on the fifth floor of an office tower, is off a busy corridor and that any violence would probably have been visible through a narrow glass panel on the door and reported.
Security cameras filmed Octa entering the room in the late morning and exiting in a wheelchair, apparently unconscious or dead, more than two hours later. The interview room has no cameras.
Police have given conflicting accounts of the incident, saying both that Octa’s blood had been found on blinds in the Citibank office and that the “blood” was just a stain. Djafar, the police spokesman, said investigators think debt collectors wanted “to frighten and intimidate” Octa but not kill him.
A doctor who examined Octa’s corpse the day after he died wrote two reports: One said he had suffered “asphyxiation” and a “strike from a blunt instrument”; the other said that he’d had a brain hemorrhage.
To try to buttress its assertions that Citibank and its debt collectors are responsible, a law firm working for the widow had Octa’s body dug up from a cemetery on the outskirts of Jakarta in April. An eminent forensic doctor who examined the decomposing body reported multiple bruises and blamed “blunt violence.” Police rejected this freelance autopsy.
The central bank, meanwhile, has barred Citibank from issuing new credit cards for two years and from using outside collection agents during that period.
Citibank has brought all its debt collection in-house and written off its dead client’s debts. It also offered Octa’s family a monthly stipend, life insurance for his widow and a promise to cover his two daughters’ education. The family, pushing for a bigger payout in court, rejected the offer.