Banks strive to recoup Robby's debts

Banks strive to recoup Robby's debts

JAKARTA (JP): Bank Bumi Daya (BBD) and Bank Pembangunan
Indonesia (Bapindo) are searching for ways of tackling Robby
Tjahyadi's debt arrears of around Rp 500 billion (US$239 million)
at the two state banks.

Spokesmen of the two banks said Saturday that technical and
administrative solutions are being hammered out to recoup the
unpaid debts of Robby, the owner of the Kanindo Group of textile
companies.

Sampurna and Eddy Tjahyono, respectively spokesmen for BBD and
Bapindo, confirmed that Robby has defaulted on his loans to the
two banks, but both refused to disclose the exact amount of the
overdue debt.

Reliable sources, however, put Robby's debt arrears at the two
banks in the neighborhood of Rp 500 billion.

Robby's bad debts have been widely published in the news media
after Minister of Finance Mar'ie Muhammad and Minister of
Industry Tunky Ariwibowo made a statement early last week about
the plan of Texmaco Group, a major textile producer, and the
Association of Batik Cooperatives (GKBI) to take over the Kanindo
Group.

The ministers' statements followed the stunning allegation
about the Kanindo Group's debt problem made by a member of the
House of Representatives (DPR) in February, just weeks after the
Golden Key Group's huge unpaid debt at Bapindo became public.

Credit

Robby, according to reliable sources, received credit
facilities totaling Rp 474 billion from both BBD and Bapindo
between 1990 and 1993 to build up his textile giant, now known as
the Kanindo Group.

The loans, which carry interest of between 20 and 28 percent
per year, have partially turned sour, leaving Robby with debt
arrears of around Rp 376 billion as of March. The overdue amount
is estimated to rise to Rp 490 billion by the end of this year if
no fresh payments are made, the sources said.

Kanindo executives acknowledged that the textile giant suffers
from a serious liquidity problem as suppliers of raw materials
for the textile manufacturing have required cash for all goods
they sold, following the disclosure of the business group's debt
problem.

An executive of another textile company said that the Kanindo
Group's problems worsened in the following months as the group
sold most of its products below their production costs due to its
severe need for cash.

In February, Bambang Warih Kusuma, a DPR member, disclosed
that the Kanindo Group's bad debt was larger than Bapindo's
credit facility defaulted by the Golden Key Group.

Eddy Tansil, Golden Key's boss, was sentenced early this month
to 17 years for circumventing banking procedures, which
apparently caused Bapindo to lose more than US$448 million. The
former head of Bapindo's Jakarta branch was sentenced to nine
years for his part in helping Tansil cash the illegal credit
facility, while the bank's three former presidents are now being
tried for their alleged roles in the case.

Similar

The Kanindo Group's case is similar to that of the Golden Key
Group, Bambamg said, alleging that Robby also violated banking
standards and channeled the loan facility to other business
activities outside his textile operation.

He also charged that Robby, who spent five years in jail in
the 1970s for smuggling luxury cars into the country, had
overvalued his assets in order to receive such a large loan.

State Minister for Investment Sanyoto Sastrowardoyo said
Friday bankers are at fault if Kanindo's loans were abnormally
too high.

"BKPM just gave an investment license," said Sanyoto, also the
chairman of the Investment Coordinating Board (BKPM). "It is the
bank which should assess whether or not a project is feasible and
whether Robby's assets were overvalued."

In a related development, Johannes Kotjo, a former executive
of the Salim Group, confirmed over the weekend that he and his
associates have provided a bridging loan of Rp 825 million (US$
379,000) per day to salvage the debt ridden Kanindo group.

He said his side, which includes Kim Johannes Mulia, an
Indonesian businessman living in Singapore, would have an option
to receive the Kanindo group's shares if Robby is not able to
repay the loans, which would be extended to the company at Rp 825
million per day within six months beginning Aug. 1. (hen)