"Bank Indonesia has already taken steps to track down the funds, temporarily stopping transaction activities for accounts or people who are suspected of being involved in the case," the central bank said in a statement over the weekend.

"If there were any irregularities or criminal acts that are against existing laws, Bank Indonesia will immediately make a report to police headquarters," it added.

The Bank Bali scandal centers around the controversial transfer of around $80 million from the bank to a company controlled by a senior official in the ruling Golkar Party. Allegations have surfaced that the money was used to help finance the campaign to reelect President BJ Habibie later this year. Golkar has denied receiving any of thefunds.

The Indonesian Bank Restructuring Agency (IBRA) said Bank Indonesia needed to freeze accounts in order to secure the funds. In an effort to further find out what happened to the funds -- which were part of a 904 billion rupiah ($116.34 million) transfer to Bank Bali to pay it back for loans owed it by a closed bank -- IBRA said it has appointed PriceWaterhouseCoopers to conduct an independent audit.

The agency, which has been under fire to account for the missing funds, said it had traced some of those funds to the bank accounts of PT Era Giat Prima, the company controlled by senior Golkar official Setya Novanto. Others funds were traced to the account of Golkar official Joko Tjandra, who also controls EGP.

IBRA said the appointment of PriceWaterhouseCoopers is intended to ensure an impartial investigation process as the international auditing firm will look to validate the findings of an investigation team set up earlier by IBRA.

The appointment was in line with the recommendation made by theInternational Review Committee, an independent committee set up in June at the urging of the International Monetary Fund and the Asian Development Fund to oversee IBRA's operations. The IMF has said it is "extremely concerned" about the Bank Bali case.

Meanwhile, IBRA said it will proceed with the program to recapitalize Bank Bali through a rights issue to be conducted in October.

IBRA demanded that Rudy Ramli, former president director of the bank, and EGP return the money to the bank as the agency will use its power under a recently-passed government regulation to cancel the contract signed between the two parties.

Newspaper reports Monday quoted a senior Golkar party leader AA Baramuli as saying that the money will be returned to the bank "as a gesture of good faith" by Messrs. Novanto and Tjandra.

Baramuli said the decision to return the mone was made voluntarily, adding that the two men were "deeply depressed" over of the controversy.