Bank debts priority for new IBRA chief

Bank debts priority for new IBRA chief

Dadan Wijaksana, The Jakarta Post, Jakarta

State Minister of State Enterprises Laksamana Sukardi expects
the newly-appointed Chairman of the Indonesian Bank Restructuring
Agency (IBRA) Syafruddin Temenggung to move quickly to resolve
the US$10 billion debt owed by former bank owners to the
government.

He said that this would be Syafruddin's top priority in
addition to meeting the state budget target of raising cash from
assets sales to help finance the state budget deficit.

"I hope Syafruddin can be tough with the (bad) debtors, as the
conclusion of the debt settlement program is considered a
priority for him, aside from (achieving the state budget)
target," Laksamana told reporters after Syafruddin was sworn in
on Monday.

Laksamana added that in resolving the multi-billion debt
problem, Syafruddin must always follow existing regulations and
that his decisions should not benefit the conglomerates at the
expense of the public.

The Office of the State Minister of State Enterprises oversees
the agency.

After months of speculation, Laksamana finally announced on
Friday that he had dismissed I Putu Gede Ary Suta from IBRA and
replaced him with Syafruddin, an aide to the Coordinating
Minister of the Economy, and secretary of the powerful Financial
Sector Policy Committee (FSPC), which groups senior economic
ministers and that has the final say on IBRA's major assets sales
and debt restructuring programs.

Ary Suta, who was appointed as IBRA chairman by president
Abdurrahman Wahid 10 months ago, had been in disagreement over
various issues with Laksamana.

He had been widely criticized for championing a proposal to
extend the deadline period for the ex-bank owners in repaying
their debts owed to the government. The plan, seen as favoring
the debtors, has been scrapped by the Cabinet amid strong public
criticism.

The debtors in question, totaling 33, were those whose banks
received bail-out funds in 1997 and 1998 amid the devastating
financial crisis. For some of them, the deadline to repay the
debts expires this year.

The government has assigned a special group of legal experts
to select which debtors have been uncooperative and to recommend
measures to be taken against them.

Analysts have said that Syafruddin will have to replace the
existing deputy chairmen of IBRA, who were hand-picked by Ary
Suta, if he wants to move quickly in resolving the debt case.

Asked whether there is already a plan to reshuffle other high-
ranking posts, Syafruddin did not rule out such a possibility.

"I'll talk to Pak Laks (Laksamana) over this, but (the idea)
is still far from my mind," replied Syafruddin.

Syafruddin is the seventh chairman of IBRA since the agency,
which has received some Rp 600 trillion ($60 billion) worth of
assets from ailing banks, was set up in 1998.

Elsewhere, Laksamana dismissed earlier speculation that
President Megawati Soekarnoputri had doubts about replacing Ary
Suta with Syafruddin.

"There was no rejection at all from the President. In fact, I
have been asked to accelerate the process. So this is based on a
request of the President," Laksamana said.

With the huge assets controlled by IBRA, the agency has been
the center of attention not only for the government but also
politicians and businessmen, particularly indebted conglomerates.
These vested interest groups have been trying to exert influence
on the agency.