House grills IBRA over Guthrie deal<\/p>\n
JAKARTA (JP): The House of Representatives commission IX on
\nstate budget and finance questioned the Indonesian Bank
\nRestructuring Agency (IBRA) on Tuesday regarding its recent
\nUS$350 million deal with Malaysia's Kumpulan Guthrie Bhd.<\/p>\n
Legislators said that the sale of hundreds of thousands of
\nhectares of oil palm plantations to the Malaysian company could
\ncreate political and security problems in Sumatra and other
\nprovinces.<\/p>\n
\"Why did IBRA proceed with the transaction when there's a
\nproblem,\" said legislator Rizal Djalil during a hearing involving
\nthe commission and the agency.<\/p>\n
\"The implications of IBRA's decision is huge ... It could
\ncreate instability in Riau and other areas. You should have been
\nsensitive to this kind of thing,\" he added.<\/p>\n
In November last year IBRA sold 24 oil palm plantation firms
\npreviously owned by the Salim Group to Kumpulan Guthrie for
\napproximately US$350 million. The sale was conducted following a
\ncompetitive bidding process.<\/p>\n
The Malaysian firm deposited the money in an escrow account.<\/p>\n
The plantation firms, covering some 260,000 hectares, are
\nlocated in the provinces of Sumatra, Kalimantan and Sulawesi.<\/p>\n
Some local farmers and legislators have protested the deal,
\ndemanding that the government cancel the transaction amid claims
\nthat part of the plantation land belongs to the local people.<\/p>\n
IBRA Chairman Edwin Gerungan declined to respond, arguing that
\nthe problem was no longer within the agency's authority.<\/p>\n
\"At the current stage of developments the decision is in the
\nhands of the finance minister or coordinating minister for the
\neconomy. It is no longer in IBRA's hands,\" Edwin said.<\/p>\n
Finance Minister Prijadi Praptosuhardjo has also flatly
\nrejected the demand for an annulment of the deal with the
\nMalaysian state plantation company.<\/p>\n
The House commission IX decided to form a joint team with the
\nHouse commission III to help sort out problems with IBRA's deal
\nwith Kumpulan Guthrie.<\/p>\n
The oil palm plantation firms were part of the assets
\ncomprising some 100 companies surrendered by the Salim Group to
\nrepay its debt to the government. IBRA must dispose of the assets
\nto raise funds to help finance the state budget deficit.<\/p>\n
Several IBRA officials have said that canceling the
\ntransaction with Kumpulan Guthrie could further erode
\ninternational investor confidence in the ailing economy.<\/p>\n
They said such a move would also destroy the credibility of
\nIBRA when selling other assets in the future.<\/p>\n
IBRA, which manages about Rp 600 trillion in assets and debts
\nseized from closed, nationalized and recapitalized banks, has
\ntargeted Rp 27 trillion to be raised in cash this year to help
\nfinance the state budget.<\/p>\n
Malaysia's International Trade and Industry Minister Rafidah
\nAziz is scheduled to visit Jakarta in March to discuss a number
\nof issues, including the problems faced by Malaysian plantation
\ncompanies in Indonesia.<\/p>\n
It is reported that Rafidah hopes the government of Indonesia
\nwill stand firm on the sale of the Salim Group plantations to
\nGuthrie.<\/p>\n
Meanwhile, legislator Paskah Suzetta suspected that there had
\nbeen political intervention in the transaction process.<\/p>\n
\"I'm sure that this is not a mistake on the part of IBRA.
\nThere must have been political intervention from the top,\" Paskah
\nsaid, pointing out that the agency had to seek approval from the
\npowerful ministerial Financial Sector Policy Committee (FSPC)
\nwhen conducting transactions valued over Rp 1 trillion.<\/p>\n
\"I want this kind of intervention eliminated ... There's no
\nneed for IBRA to be accountable to the FSPC, because IBRA needs
\nonly report to the finance minister,\" he added.<\/p>\n
FSPC, chaired by the chief economic minister, groups several
\neconomic ministers to oversee the country's major bank and
\ncorporate restructuring program. The committee was formed last
\nyear following the high profile Bank Bali scandal which involved
\na senior IBRA official.<\/p>\n
Other legislators also suspected that the FSPC had been
\nintervening in IBRA's affairs.<\/p>\n
Reports have earlier indicated that the recent decision by two
\nIBRA deputy chairmen to resign was prompted by the strong
\nintervention of senior economic ministers in the agency's
\naffairs.<\/p>\n
IBRA deputy chairman for bank restructuring Jerry Ng
\nreaffirmed on Tuesday his decision to leave the agency and return
\nto the private sector.<\/p>\n
Jerry, however, said that he resigned from the agency because
\nmost of his bank restructuring programs had been completed.<\/p>\n
But IBRA deputy chairman for asset management investment
\nMahmuddin Yasin said that Finance Minister Prijadi Praptosuhardjo
\nhad asked him to stay at the agency.<\/p>\n
Mahmuddin is a senior official from the finance ministry.<\/p>\n
\"As government employees, we have a code of conduct. If the
\nminister asks me to continue, I have to follow his orders,\" he
\nsaid. (rei)<\/p>",
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