Team to finalize IBRA debt extension plan<\/p>\n
Berni K. Moestafa, The Jakarta Post, Jakarta<\/p>\n
A small government team will finalize talks over a controversial
\nplan to grant debt payment extensions for large debtors of the
\nIndonesian Bank Restructuring Agency (IBRA), while also reviewing
\nthe problems plaguing other IBRA debtors.<\/p>\n
Coordinating Minister for the Economy Dorodjatun Kuntjoro-
\nJakti said President Megawati Soekarnoputri and Vice President
\nHamzah Haz had agreed on the formation of the team during a
\nCabinet meeting on Friday.<\/p>\n
\"This small team will have to review everything, not just the
\nlarge debtors but also the small ones, the loans for farmers up
\nto the BLBI issue,\" he said, referring to the Rp 144.5 trillion
\n(about US$13.9 billion) in liquidity support loans (BLBI), of
\nwhich nearly all are believed to have been misused.<\/p>\n
Dorodjatun said the team would be comprised of inter-
\nministerial officials and was expected to wrap up its work by mid
\nFebruary.<\/p>\n
Any conclusions from the team will still be subject to
\nconsultation with legislators and approval from the Cabinet, he
\nadded.<\/p>\n
On the debt extension plan, Dorodjatun said he hoped the team
\nwould come up with a solution to the countless futile legal
\nactions against uncooperative debtors.<\/p>\n
\"We will need the cooperation of the Coordinating Ministry for
\nSecurity, the Attorney General's Office and the National Police
\nChief,\" he explained.<\/p>\n
The controversy over the debt extension plan centers on the
\ngovernment offering uncooperative debtors incentives rather than
\npunishment.<\/p>\n
People's Consultative Assembly Speaker Amien Rais criticized
\nthe government for its insensitive decision,detik.com reported on
\nFriday.<\/p>\n
While the public has been burdened again by the raise in fuel
\nprices, the government continues to give debtors leeway to escape
\npayment, Amien said.<\/p>\n
Under a new shareholders settlement program, IBRA extended the
\ndebt payment period for its debtors to 10 years from four.<\/p>\n
It has also effectively lowered the interest rates that
\ndebtors must pay, by decoupling them from Bank Indonesia's three
\nmonth promissory notes, now at some 17 percent.<\/p>\n
Under the new program, debtors must pay a minimum interest
\nrate of only nine percent.<\/p>\n
The shareholder settlement program applies to former bankers,
\nwhose banks the government bailed out from the impact of the 1997
\nfinancial crisis.<\/p>\n
But a report by the Supreme Audit Agency revealed abuses
\namounting Rp 138.4 trillion in the use of the bail out funds
\nunder the BLBI scheme.<\/p>\n
This should have led to the prosecution of the banks' owners,
\nyet the government opted instead for an out of court settlement.<\/p>\n
The shareholders settlement program is an umbrella agreement
\non which are based various debt settlement schemes.<\/p>\n
In 1998, five conglomerates agreed to enter the program under
\none scheme known as the Master of Settlement and Acquisition
\nAgreement (MSAA).<\/p>\n
For Bank Dagang Negara Indonesia (BDNI) owner turned MSAA
\ndebtor, Sjamsul Nursalim, the deadline for his debt settlement is
\nthis year.<\/p>\n
He owes the state some Rp 28.4 trillion, but a long deadlock
\nover talks on the term of payment have been stalling the payment
\nprocess to this point.<\/p>\n
\"After 3.5 years without a settlement, the question we must
\nask ourselves, is that of law enforcement,\" Dorodjatun said.<\/p>\n
He said since the shareholder settlement program was using an
\nout of court approach, uncooperative debtors should be brought to
\ncourt.<\/p>\n
But some experts said that past deals like the MSAA were so
\nweak that even if IBRA had a strong case against its debtors, the
\nlatter could still claim victory in court.<\/p>\n
IBRA chairman I Putu Gede Ary Suta said there were currently
\n2,400 legal cases against the uncooperative debtors in process.<\/p>\n
\"The court has issued verdicts on 230 cases; we lost nearly
\nall of them,\" Ary Suta lamented.<\/p>\n
According to the experts, IBRA's position is made worse by the
\nfact that bribery is a common practice at court -- a situation
\nthat is often behind the many controversial decisions the
\nIndonesian courts are known for.<\/p>\n
\"This (IBRA's weak legal power) is everybody's problem,\"
\nDorodjatun said.<\/p>\n
He has earlier promised tougher legal actions against the
\nuncooperative debtors to accompany the incentives they had
\nreceived from the revised shareholder settlement program.<\/p>\n
Major debtors<\/p>\n
(Shareholders -- Bank name -- Amount of debt (in trillion rupiah)):
\nSoedono Salim -- BCA -- 52.73;
\nUsman Admadjaja -- Danamon -- 12.53;
\nSjamsul Nursalim -- BDNI -- 28.41;
\nKaharuddin Ongko -- BUN -- 8.35;
\nMohammad Hasan -- BUN -- 5.34;
\nSamadikun Hartono -- Modern -- 2.66;
\nHokiarto & Hokianto -- Hokindo -- 0.29.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/team-to-finalize-ibra-debt-extension-plan-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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