Government assesses 'power' to nail corrupt tycoons<\/p>\n
JAKARTA (JP): Finance minister Bambang Sudibyo said on
\nWednesday the three-month old government was still assessing
\nwhether it had the \"real political power\" to put behind bars the
\n\"powerful\" businessmen responsible for creating the messy banking
\nsector and burdening tax payers.<\/p>\n
Bambang said there were high expectations the planned
\ninvestigative audit on the alleged abuse of the multibillion
\ndollar government bailout money for ailing banks between 1997 and
\n1998 would lead to the jailing of the culprits.<\/p>\n
\"But in reality, if you want to nail someone you must be more
\npowerful than the one you're trying to catch,\" he told the House
\nof Representatives commission IX on state budget and banking
\nduring a hearing session.<\/p>\n
\"The (recent) democratic general election has come up with a
\nlegitimate government. But did this process also provide real
\npower? Has the balance of power shifted (to the new regime)?\" he
\nsaid.<\/p>\n
\"We don't know this yet. This is still being measured and
\ncalculated,\" Bambang said.<\/p>\n
\"Legitimacy is just one source of power. Money, weapons and
\nexperience ... can also create power,\" he said, comparing the
\npower of President Abdurrahman Wahid's administration formed last
\nyear through the country's most democratic election in decades
\nwith that of the powerful businessmen who had colluded with the
\n32-year old Soeharto regime.<\/p>\n
The Abdurrahman administration is also under strong pressure
\nto resolve various problems inherited from the previous
\ngovernment, including separatists demands, sectarian clashes and
\nhuman rights violations by the powerful Indonesian Military
\n(TNI).<\/p>\n
Bambang was responding to demands from legislators that the
\ngovernment act firmly in dealing with bad bankers who had abused
\nthe government's bank liquidity support.<\/p>\n
The government, through the central bank, injected some Rp
\n164.5 trillion (US$22.46 billion) in liquidity support between
\nlate 1997 and 1998 to help ailing banks stay afloat at the height
\nof the economic crisis.<\/p>\n
But a recent general audit on Bank Indonesia's balance sheet
\nas of May, 1999, by the Supreme Audit Agency (BPK) showed that
\nmore than Rp 80 trillion of the liquidity support had been
\nimproperly injected.<\/p>\n
Many have suspected that bad bank owners abused the liquidity
\nsupport to speculate on the foreign exchange market amid the
\nrupiah's meltdown in 1998.<\/p>\n
BPK has just started its investigative audit on the possible
\nabuse of the liquidity support. The agency plans to investigate
\nboth Bank Indonesia and the recipient banks.<\/p>\n
The audit agency will be assisted by the Attorney General's
\nOffice, which will conduct a legal audit.<\/p>\n
Audit agency chief Satrio B. Yudono said recently he expected
\nthe audit to be completed in six months time.<\/p>\n
Meanwhile, head of the House commission IX Sukuwalujo
\nMintoharjo said the commission would summon former finance
\nministers Fuad Bawazier, Bambang Subianto and Mar'ie Muhamad and
\nformer Bank Indonesia governor Sudradjat Djiwandono for
\nquestioning over the bank liquidity support policy.<\/p>\n
Sukowalujo said the commission would also summon former bank
\nowners, including Anthony Salim (former owner of Bank BCA),
\nSjamsul Nursalim (Bank BDNI), Mohamad Bob Hasan (Bank BUN) and
\nUsman Admadjaja (Bank Danamon).<\/p>\n
The four banks were the largest recipients of liquidity
\nsupport, totaling Rp 100 trillion. Bank BDNI and Bank BUN have
\nbeen closed down, while the other two banks have been
\nnationalized.<\/p>\n
The former bank owners have also developed other large
\nbusinesses, allegedly by abusing their banks' deposits and
\ngovernment connections.<\/p>\n
The government has thus far issued bonds worth Rp 164.5
\ntrillion to the central bank to cover for the liquidity support.<\/p>\n
Meanwhile, deputy chairman of the Indonesian Bank
\nRestructuring Agency (IBRA) Arwin Rasyid said the agency expected
\nto be able to recover some Rp 120 trillion from the collaterals
\n(assets) surrendered by the owners of the recipient banks.<\/p>\n
Bank Indonesia governor Sjahril Sabirin has said liquidity
\nsupport was an inevitable contingency measure to prevent the
\ndomestic banking system from a complete breakdown.<\/p>\n
Sjahril pointed out liquidity support had to be injected into
\nbanks facing massive runs from nervous depositors at a time when
\nconfidence in the industry was at its nadir. (rei)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/government-assesses-power-to-nail-corrupt-tycoons-1447893297",
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