BI board of governors resigns<\/p>\n
JAKARTA (JP): Bank Indonesia's Senior Deputy Governor Anwar
\nNasution and four other deputy governors resigned en masse here
\non Friday night to take what they called moral responsibility for
\nseveral billions of dollars in emergency support loans extended
\nto bail out commercial banks in 1997-1999.<\/p>\n
Anwar, who has been acting governor since the arrest of
\ngovernor Sjahril Sabirin in June over alleged involvement in the
\nbank Bali scandal, announced the resignation at a closed-doors
\nmeeting at the House of Representatives.<\/p>\n
\"Hopefully, our resignation will help speed up the settlement
\nof the controversy over the emergency liquidity loans,\" Anwar
\nsaid in a prepared statement at the meeting between the
\ngovernment, the House and the central bank.<\/p>\n
Anwar did not include Sjahril and two other deputy governors,
\nAulia Pohan and Achjar Iljas, in his statement of resignation.
\nOther deputy governors who quit are Miranda S. Gultom,
\nBurhanuddin Abdullah, Achwan and Dono Iskandar.<\/p>\n
He added, however, that they would continue on their job until
\ntheir successors are in place.<\/p>\n
Soon after Anwar announced the resignation, chief economic
\nminister Rizal Ramli said that a final agreement had finally been
\nreached which saved Bank Indonesia from the threat of
\nrecapitalization or liquidation.<\/p>\n
\"We have agreed that Bank Indonesia will bear only Rp 24
\ntrillion (US$2.6 billion) of the disputed Rp 144.5 trillion in
\nemergency loans, with the remainder taken up by the government,\"
\nRizal told reporters.<\/p>\n
The central bank, he added, would issue to the government
\nbonds equivalent to that amount that became its responsibility.<\/p>\n
Rizal referred to the row between the government and Bank
\nIndonesia over which should be responsible for the huge spending
\nafter the Supreme Audit Agency found in an investigative audit
\nlast year that Bank Indonesia had improperly extended Rp 130
\ntrillion of the loans and that Rp 80 trillion of that sum had
\nbeen misused by recipient banks.<\/p>\n
Rizal also disclosed that a number of senior officials and
\nbusinessmen who acted as economic advisors to former president
\nSoeharto were found morally responsible for the misuse of the
\nhuge loan funds.<\/p>\n
Included among the officials and businessmen he cited are
\nformer presidents Soeharto and B.J. Habibie, Widjojo Nitisastro,
\nMar'ie Muhammad, Bambang Subianto, Soedradjad Djiwandono, Glenn
\nJusuf, Fuad Bawazier, Moerdiono, Mohamad 'Bob' Hasan, Sjahril
\nSabirin, Boediono, Ali Wardhana.<\/p>\n
\"The meeting found both professional misjudgement and abuse of
\npower were responsible for the misuse of the emergency liquidity
\nsupport,\"<\/p>\n
Sources told The Jakarta post last night that House Commission
\nIX (finance and banking) would continue meeting until Monday
\nbecause President Abdurrahman Wahid is to propose on Saturday to
\nthe House a list of candidates for the new central bank's board
\nof governors.<\/p>\n
The government had previously threatened to take back the
\ntreasury bonds it has issued to reimburse the central bank for
\nthe loans after the Supreme Audit Agency (BPK) found in an
\ninvestigative audit last year that more than Rp 130 trillion of
\nthe credits had improperly been extended by the central bank.<\/p>\n
Earlier in the morning President Abdurrahman Wahid reiterated
\nhis intention to replace the board of governors in a bid to clean
\nup the central bank.<\/p>\n
Bank Indonesia's senior deputy governor said on Wednesday the
\ncentral bank was willing to bear Rp 24 trillion of the total
\nemergency loans.<\/p>\n
Analysts said Abdurrahman seemed to use the loan transaction
\nas a way to force the reshuffle of the central bank management.<\/p>\n
Some analysts have also expressed concern that the current
\ncontroversy over the recapitalization plan of Bank Indonesia was
\nanother form of political interference by the President in the
\ncentral bank.<\/p>\n
The Central Bank Law does not stipulate that a management
\nreshuffle is a precondition for the recapitalization of Bank
\nIndonesia. The law only says that the government shall
\nrecapitalize the central bank if its capital drops to below the
\nminimum Rp 2 trillion level.<\/p>\n
\"Because of the current high political temperature, people
\nwill think that if there's a change in the (BI) top management it
\nis more political interference than a legitimate concern over the
\ncentral bank's equity capital,\" said noted economist Sri Mulyani.<\/p>\n
\"If that happens, the financial market will think that the
\nindependent status of Bank Indonesia is now over,\" she added.<\/p>\n
According to the Central Bank Law, enacted in May 1999, the
\nboard of governors are appointed by the House.<\/p>\n
Since assuming office late last year, Abdurrahman has made it
\nno secret that he wants a reshuffle in the Bank Indonesia board
\nof governors.<\/p>\n
But the President could not easily implement his intention,
\nbecause according to the Central Bank Law, the members of the
\nboard of governors can not be replaced unless they are proven to
\nhave committed a crime, are incapacitated or voluntarily step
\ndown.<\/p>\n
Bank Indonesia Governor Sjahril Sabirin was arrested in June
\nas a suspect in the high-profile Bank Bali scandal and is now
\nunder house arrest awaiting trial.<\/p>\n
Prior to his arrest, Sjahril had accused the President of
\npolitical interference in the independent central bank by asking
\nhim to either step down or risk legal prosecution over his
\nalleged involvement in the bank scandal. (rei)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/bi-board-of-governors-resigns-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}