Ary Suta appointed as new IBRA chairman

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)