Ary Suta appointed as new IBRA chairman
JAKARTA (JP): The government installed on Monday I Putu Ary Suta, a former chief of the Capital Market Supervisory Agency (Bapepam), as the new chairman of the Indonesian Bank Restructuring Agency (IBRA), replacing the widely respected Edwin Gerungan.
The move was part of the first reshuffle in the powerful finance ministry since Rizal Ramli took over the department earlier this month.
Speaking to journalists following the inauguration ceremony, Rizal said the change in IBRA leadership was necessary to help speed up the sale of assets held by the agency.
Rizal said IBRA had so far only sold some 20 percent of the estimated Rp 540 trillion (US$50 billion) in total assets under its control. The agency must complete its work by 2004.
The financial market was largely unaffected by the reshuffle. The rupiah ended slightly lower on Monday at Rp 11,365 to the US dollar, from Rp 11,355 on Friday.
IBRA, formed in early 1998 following the 1997 financial crisis, is seen as a vital institution in helping the country recover from the crisis. The agency took over the assets of ailing banks and indebted former bank owners, with a mandate to restructure the banks' nonperforming loans and sell the assets to raise cash to help finance the state budget deficit.
The dismissal of Edwin was not completely unexpected and rumors of his impending removal had earlier made the rounds. Edwin has not always seen eye-to-eye with Rizal, previously the coordinating minister for the economy and the head of the Financial Sector Policy Committee (FSPC), which has the right to final approval of major corporate restructuring deals worked out by IBRA.
An official at the FSPC earlier accused IBRA and the finance ministry under Prijadi Praptosuhardjo, Rizal's predecessor, of not implementing some 140 decisions on corporate debt restructuring programs approved by the committee.
In another move, Rizal appointed Widjanarko, Rizal's aide when he was the country's economics czar, as the new secretary-general of the finance ministry, replacing Noor Fuad, who was installed as the head of the ministry's education and training center.
There have been rumors that Rizal is also planning to fire the director general of financial institutions, Darmin Nasution, and the director general of excise and customs, Gede Pramana Agung.
Speaking after the ceremony, Rizal said the government planned to promote Edwin to a senior monetary and finance position, raising speculation that he would be appointed to the board of governors of Bank Indonesia.
"The position is offered to Pak Edwin as a token of appreciation and gratitude from the government for his integrity and hard work during his leadership of IBRA," Rizal said. He, however, declined to name the position.
In response, Edwin said he would consider the offer.
Edwin, who became IBRA's fifth chairman last November, gained a reputation for integrity during his seven-month term.
"Edwin had the qualities needed to lead IBRA. He is not only honest and bright, but has the guts to make tough decisions quickly," said Theo Toemion, a legislator on the House of Representatives Commission IX for the state budget and finance, which also oversees the work of IBRA.
He pointed to the recent decision taken by Edwin to proceed with the sale of plantation firms to Malaysia's Kumpulan Guthrie Bhd., despite protests from politicians and some senior government officials.
"We need these kind of qualities in an environment filled with various parties, including large business groups, with strong vested interests," Theo said.
Separately, Arie Kuncoro, an economist at the University of Indonesia, doubted the appointment of Ary Suta would accelerate the sale of assets under IBRA's control, a process slowed by political meddling.
"Ary Suta will also face a lot of political obstacles. So I doubt the change will make a significant difference," he said.
IBRA hopes to raise a total of Rp 27 trillion ($2.37 billion) in cash this year through the sales of assets.
Edwin said the agency had so far raised about Rp 11.25 trillion.
He dismissed suggestions the agency was sluggish in disposing of the assets, and expressed confidence that IBRA could meet its cash target.
Meanwhile, Ary Suta vowed to take swift action to speed up the sale of IBRA's assets. "Give me a while to think about my new job, as I have to implement steps to speed up the process," he said, declining to provide details of his immediate programs.
"It is too soon (to discus the programs) as I was only notified of my appointment the morning before I was installed," said Ary Suta, who headed Bapepam from 1995 to 1998 and held a senior position in the finance ministry before assuming the top position at IBRA. (03/rei)