IBRA broke guarantee: Bond holders<\/p>\n
JAKARTA (JP): Fixed-income investors in banks liquidated by
\nthe government last year have complained about the difficulties
\nimposed by the Indonesian Bank Restructuring Agency (IBRA) to
\nrecover their government-guaranteed investments.<\/p>\n
Nathaniel Tanaya, who holds Rp 3 billion (about US$375,000) of
\nbonds issued by the now defunct Bank Modern in 1995, said on
\nSaturday that he and many other investors were experiencing
\nproblems trying to exercise their rights.<\/p>\n
\"Most of them are institutional investors, including
\nprovincial development banks, who are afraid to complain openly
\nabout this problem,\" he told reporters.<\/p>\n
Bank Modern was one of the 10 ailing private banks closed down
\nby the government in 1998 as part of the restructuring program
\nfor the country's beleaguered banking industry.<\/p>\n
Prior to the banking closures, a presidential decree was
\nissued in which the government guaranteed depositors' money and
\nbonds.<\/p>\n
The blanket guarantee system, which started in January 1998
\nand is to end on January 31, 2000, has managed to prevent
\nwidespread panic in the shaky banking system.<\/p>\n
The decree stipulates that IBRA is in charge of managing the
\nguarantee system.<\/p>\n
\"I have demanded the central bank and IBRA return my money but
\nthey ignored me,\" Nathaniel said. He showed reporters the
\nauthentic bond documents issued by Bank Modern.<\/p>\n
He said that the bonds were due on Oct. 25, 2000, but under a
\nstated option term, investors had the right to cash in their
\ninvestments on Oct. 25, 1998.<\/p>\n
\"How can you expect people to trust the financial authorities
\nif they can't even keep their word,\" he said.<\/p>\n
The return of confidence is an essential factor in rebuilding
\nthe country's battered economy, particularly the financial
\nsector, as the government has been expecting investors to
\nparticipate in financing the bank restructuring program.<\/p>\n
The government plans to issue bonds worth about Rp 500
\ntrillion to finance the restructuring program.<\/p>\n
IBRA has assumed over US$10.4 billion worth of fixed assets
\nsurrendered by owners of the 10 liquidated banks to repay their
\nobligations to the government.<\/p>\n
IBRA chairman Glenn S. Yusuf and several other senior
\nofficials visited five world financial centers last week
\nattempting to gauge foreign interest in the IBRA controlled
\nassets.<\/p>\n
IBRA plans to sell these assets in four years' time.<\/p>\n
IBRA also controls over Rp 220 trillion in non-performing
\nloans taken from state banks, major private banks, and 38 banks
\nclosed down in March.<\/p>\n
The agency also holds banks' non-core assets, including
\npaintings, cars and office equipments, worth trillions of rupiah.<\/p>\n
The agency aims to raise at least Rp 17 trillion in the
\ncurrent 1999\/2000 fiscal year to help finance the coupon rate of
\nthe bank recapitalization bonds. (rei)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/ibra-broke-guarantee-bond-holders-1447893297",
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