Ary Suta plans to shorten IBRA chain of command<\/p>\n
JAKARTA (JP): Newly appointed chief of the Indonesian Bank
\nRestructuring Agency (IBRA), I Putu Ary Suta, said he planned to
\nrevamp the organization and shorten its decision flow to help
\nexpedite the restructuring of corporate debts.<\/p>\n
Ary Suta said that after less than a week at his new post, he
\nconcluded that IBRA's decision flow was too complex, which made
\nit difficult to reach decisions quickly.<\/p>\n
\"What we're trying to do is first to shorten that (decision
\nflow) within IBRA,\" he told businessmen at a meeting with the
\nIndonesian Chamber of Commerce and Trade (Kadin) on Saturday.<\/p>\n
\"I was surprised to find out that even small decisions require
\nthe signatures of 13 different people,\" he said.<\/p>\n
Decisions on restructuring deals, he continued, were even more
\ncomplex, causing long delays in negotiations.<\/p>\n
According to him, the involvement of a large number of people
\nin the decision-making process has become a preventive measure to
\nstave off corruption and collusion charges against IBRA.<\/p>\n
\"Better to be wrong together than wrong alone,\" he said.<\/p>\n
Ary Suta's concern to speed up IBRA's restructuring process
\ncomes after his predecessor Edwin Gerungan was dismissed,
\nfollowing criticism that IBRA was working too slowly.<\/p>\n
The appointment of Ary Suta followed the government's
\ndissatisfaction over Edwin's performance.<\/p>\n
Last month, the recently appointed Minister of Finance Rizal
\nRamli charged his predecessor and IBRA with undermining debt
\ndeals approved by the Financial Sector Policy Committee (FSPC).<\/p>\n
The committee groups together several senior economic
\nministers who have the final say on the country's major corporate
\ndebt deals.<\/p>\n
Rizal has said that the speedy restructuring of corporate
\ndebts was vital to the country's economic recovery.<\/p>\n
Businessmen have also been complaining about the agency's
\nelaborate bureaucracy, saying it hindered restructuring talks.<\/p>\n
\"The restructuring process is slow because there has been no
\ndirection,\" Ary Suta added.<\/p>\n
He was referring to IBRA's requirement to seek the FSPC's
\napproval for certain debt deals, and the possibility of such a
\ndeal being revised later on.<\/p>\n
Apart from the FSPC, IBRA also has an oversight committee,
\nwhich was established to evaluate the agency's decisions and make
\nrecommendations to the FSPC.<\/p>\n
The oversight committee has no authority to alter IBRA's
\npolicies, but could recommend a change before the FSPC.<\/p>\n
Furthermore, IBRA, as a unit of the finance ministry, must
\nalso seek the ministry's approval, including for deals that have
\nbeen decided by the FSPC.<\/p>\n
Theoretically, this should not pose a problem since the
\nfinance minister is a member of FSPC. In practice, however, many
\nof the deals are not implemented.<\/p>\n
\"It's better if everyone sits together from the very beginning
\nto come to an agreement, rather than having to revise it later
\non,\" he said.<\/p>\n
He said IBRA should stick to its deals with investors, lest
\ninvestors' confidence on its restructuring programs fades away.<\/p>\n
He further lashed out at the pervasive presence of IBRA
\nconsultants, who only worsened the already complex decision
\nprocess.<\/p>\n
\"We have got legal consultants, financial consultants,
\nmanagement consultants, operational consultants, and more,\" he
\ncomplained.<\/p>\n
Ary Suta said IBRA's reliance on these consultants proved to
\nbe costly, and caused negotiations to become \"tiresome.\"<\/p>\n
He also said that bringing uncooperative debtors to court was
\nthe least preferable solution, because IBRA rarely won a case.<\/p>\n
\"Our success rate in litigation is very small, while on the
\nother hand, taking legal action is expensive,\" he said.<\/p>\n
If IBRA's debtors, during negotiations, are deemed as
\nuncooperative, they can be brought to court to seek the
\nliquidation of their assets.<\/p>\n
However, some debtors have been able to save their assets from
\nIBRA, a situation that many blamed on loopholes in the bankruptcy
\nlaw.<\/p>\n
IBRA was established during the height of the economic crisis
\nin 1998 to take over non-performing loans from local banks.<\/p>\n
The agency's task is to restructure corporate debts, for which
\ndebtors must transfer their assets as collateral to IBRA.<\/p>\n
At present, it controls some Rp 600 trillion (about US$52
\nbillion) in assets taken over from debtors. (bkm)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/ary-suta-plans-to-shorten-ibra-chain-of-command-1447893297",
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