BPK plans a complete audit of 'rich' IBRA<\/p>\n
JAKARTA (JP): The Supreme Audit Agency (BPK) plans to soon
\nbegin a comprehensive audit of the Indonesian Bank Restructuring
\nAgency (IBRA), according to BPK senior official Bambang Wahyudi.<\/p>\n
Bambang said over the weekend that the auditing would take
\nabout two fiscal years due to the massive work involved.<\/p>\n
\"The comprehensive audit is our initiative. IBRA must be
\naudited by BPK. It will start in 2001 and will take a long
\nperiod,\" he told reporters at the BPK Headquarters.<\/p>\n
IBRA controls banking assets, estimated at Rp 600 trillion
\n(US$63.15 billion), transferred from closed and recapitalized
\nbanks, and indebted former bank owners.<\/p>\n
With such a huge asset, the agency is now regarded as the
\ncountry's richest institution, thus vulnerable to corruption and
\nexploitation by politicians, as well as well-connected
\nbusinessmen.<\/p>\n
IBRA, a unit of the finance ministry, is mandated to
\nrestructure and sell the assets to raise cash to help finance the
\nstate budget deficit which is heavily burdened by the huge cost
\nof the government bank restructuring and recapitalization
\nprogram. The agency must complete this task by 2004.<\/p>\n
A financial audit was conducted on IBRA in June last year by a
\nprivate accounting firm but the latter issued a disclaimer
\nbecause it could not obtain sufficient information from IBRA.<\/p>\n
In a meeting with IBRA last week, legislators called on the
\nagency to cooperate with BPK in providing information to allow
\nthe auditors to do their job.<\/p>\n
Bambang said the comprehensive audit would start immediately
\nafter BPK completed the investigative audit of IBRA latter this
\nmonth<\/p>\n
The House Commission IX for state budget and finance
\ninstructed BPK late last year to audit the assets, surrendered to
\nIBRA, by former bank owners to repay their debts to the
\ngovernment.<\/p>\n
\"We expect to complete the investigative audit by the end of
\nFebruary,\" Bambang said, adding that BPK has placed some 88 of
\nits auditors in IBRA since November.<\/p>\n
Bambang added that so far IBRA had been cooperative in
\nproviding the necessary information, but he admitted the process
\nhad been slow because there were too many documents and data to
\nbe looked into.<\/p>\n
The former bank owners owe, in total, about Rp 144.5 trillion
\nin bank liquidity support provided by the government via Bank
\nIndonesia between 1998 and 1999 when the country's financial and
\nbanking crisis deepened.<\/p>\n
There have been concerns that the value of the assets
\nsurrendered by the former bank owners is lower then what has been
\ndeclared.<\/p>\n
IBRA has demanded some former bank owners to add more assets
\nand provide a personal guarantee, in case the assets pledged
\nearlier are deemed insufficient to cover their debts.<\/p>\n
The bank liquidity support facility has become controversial
\nfollowing the revelation by BPK that some Rp 138 trillion of the
\nloan facility has been misused by the recipient banks.<\/p>\n
BPK said the facility was supposed to be given to banks to pay
\ndepositors amid massive bank runs at the time, but many bank
\nowners used the funds for currency speculation and to finance
\ntheir affiliated companies. The agency has said this was partly
\ndue to the weak supervision of Bank Indonesia.<\/p>\n
The government had initially demanded that the central bank
\ncover the loss, but Bank Indonesia rejected it, arguing that the
\nliquidity facility was a Cabinet decision made in late 1997, and
\nthat the government should cover the loan as planned because it
\nhad received a massive amount of assets from indebted banks.<\/p>\n
Finally, it was agreed that Bank Indonesia had only to cover
\nRp 24.5 trillion of the loan facility, while the government would
\ncover the rest. The government has issued bonds to Bank Indonesia
\nfor this purpose.(rei)<\/p>",
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