Govt avoids legal action against ex-bankers<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
The government has vowed to take legal action against indebted
\nformer bankers if, by the end of March, they decline to sign an
\nagreement to start repaying their debts.<\/p>\n
Coordinating Minister for the Economy Dorodjatun Kuntjoro-
\nJakti, however, warned that the legal action could cause the
\nstate to suffer more financial losses.<\/p>\n
\"One thing that should be remembered is that the 1998
\nagreement was an out-of-court settlement, so once we go to trial
\nwe can only use civil law,\" he told reporters on the sidelines of
\na seminar. He did not elaborate.<\/p>\n
Under the civil law system, the government cannot put
\ndelinquent debtors behind bars. It can only confiscate their
\nexisting assets and sell them at going market rates.<\/p>\n
Dorodjatun was commenting on the current controversy
\nsurrounding government plans to ease the repayment terms of debts
\nowed by ex-bankers to the Indonesian Bank Restructuring Agency
\n(IBRA).<\/p>\n
Under the plan, the repayment period would be extended to 10
\nyears from 4 years, and interest rates would be lowered to nine
\npercent.<\/p>\n
Dorodjatun said that the new plan must be signed by the
\ndebtors by the end of March or the government would be forced to
\ntake legal action.<\/p>\n
The plan has sparked protests from various quarters, some of
\nwhom say that IBRA should take legal action against bad debtors
\ninstead of easing the repayment terms.<\/p>\n
The reluctant debtors in question are those former bankers
\nwhose banks were bailed out by the government at the height of
\nthe 1997-1998 crisis.<\/p>\n
In return, the government and the debtors signed an agreement
\nunder the shareholders debt settlement program in 1998, under
\nwhich the debtors agreed to repay debts with cash and asset sales
\nwithin four years.<\/p>\n
More than three years after the scheme was put into effect,
\nmost have not even begun paying.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/govt-avoids-legal-action-against-ex-bankers-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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