IBRA faces increasing calls for investigative audit<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
As the tasks of the Indonesian Bank Restructuring Agency
\n(IBRA) near completion, debate intensifies on whether an
\ninvestigative audit on the agency is needed to check for possible
\nirregularities during its five-year existence.<\/p>\n
Such an audit, which would be different from the annual audits
\nIBRA has been holding so far, would cover all IBRA transactions
\nand working processes from the moment the agency was set up in
\n1998 to its planned closure on Feb. 27.<\/p>\n
\"I think it's a must. An investigative audit will show whether
\nall the processes, be they restructuring assets, asset sales and
\nothers, have been optimum,\" Dradjad Wibowo, an economist at the
\nInstitute for the Development of Economics and Finance (Indef),
\ntold The Jakarta Post on Sunday.<\/p>\n
The audit, he added, could then investigate suspicions of
\nwidespread improper practices.<\/p>\n
Dradjad was echoing a chorus of similar calls saying it was
\nthe best way to ensure that accountability was rendered. Some
\nlegislators have also voiced the same opinion, urging the Supreme
\nAudit Agency (BPK) to act as the auditor.<\/p>\n
Since its establishment, IBRA -- which controls billions of
\ndollars worth of assets taken from troubled banks and indebted
\nbank owners -- has faced interference from powerful politicians
\nand businessmen, which critics say is the main reason for alleged
\nbad business practices in the agency.<\/p>\n
Politicians, who are in need of cash and see the agency as a
\npotential cash cow, have reportedly been vying to influence the
\nagency. The fact that the incumbent head, Syafruddin Temenggung,
\nis the agency's seventh boss since its establishment would seem
\nto bear this out.<\/p>\n
It is this that has prompted calls for the investigative
\naudit.<\/p>\n
Syafruddin has said that the agency had no problems with the
\ndemand.<\/p>\n
Speaking during a hearing with the House of Representatives'
\nCommission IX on financial affairs last week, Syafruddin said he
\nwould not mind if an independent auditor was appointed to conduct
\nthe audit.<\/p>\n
However, Raden Pardede of the Danareksa Research Institute was
\nagainst such an idea. \"I don't think it's necessary. More work,
\nmore committees, this will only create an endless cycle of work.
\nIBRA is being audited each year, why don't we use that as a
\nguideline.<\/p>\n
\"Then, if there are cases that need to be clarified, then
\nmaybe verification will be needed, but that's it. It does not
\nhave to be a full audit all the way from the start,\" Raden told
\nthe Post.<\/p>\n
Raden also urged that similar verification be conducted on the
\nagency's unsold assets to avoid possible disputes in the future
\ninvolving the new executive bodies that it is planned to set up
\nafter IBRA's winding up.<\/p>\n
IBRA is mandated to restructure and sell the assets in the
\nform of non-performing bank loans and fixed assets taken from
\ntroubled banks and indebted former bank owners, to raise cash to
\nhelp finance the budget, which is heavily weighed down by the
\nhuge cost of bailing out troubled banks.<\/p>\n
Among the much-criticized aspects of IBRA works is the slow
\nprogress in forcing former bank owners repay their debts (most of
\nthem have still not repaid their debts after years of
\nnegotiation), and the fact that many of the loan assets that have
\nbeen sold are suspected to have been repurchased by the debtors
\nat huge discounts.<\/p>\n
The agency has posted a recovery rate of 28 percent for the
\nassets under its control, which is higher than the recovery rates
\nof similar agencies in countries such as China (8 percent),
\nThailand and South Korea (about 25 percent).<\/p>",
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