BI board of governors resigns
JAKARTA (JP): Bank Indonesia's Senior Deputy Governor Anwar Nasution and four other deputy governors resigned en masse here on Friday night to take what they called moral responsibility for several billions of dollars in emergency support loans extended to bail out commercial banks in 1997-1999.
Anwar, who has been acting governor since the arrest of governor Sjahril Sabirin in June over alleged involvement in the bank Bali scandal, announced the resignation at a closed-doors meeting at the House of Representatives.
"Hopefully, our resignation will help speed up the settlement of the controversy over the emergency liquidity loans," Anwar said in a prepared statement at the meeting between the government, the House and the central bank.
Anwar did not include Sjahril and two other deputy governors, Aulia Pohan and Achjar Iljas, in his statement of resignation. Other deputy governors who quit are Miranda S. Gultom, Burhanuddin Abdullah, Achwan and Dono Iskandar.
He added, however, that they would continue on their job until their successors are in place.
Soon after Anwar announced the resignation, chief economic minister Rizal Ramli said that a final agreement had finally been reached which saved Bank Indonesia from the threat of recapitalization or liquidation.
"We have agreed that Bank Indonesia will bear only Rp 24 trillion (US$2.6 billion) of the disputed Rp 144.5 trillion in emergency loans, with the remainder taken up by the government," Rizal told reporters.
The central bank, he added, would issue to the government bonds equivalent to that amount that became its responsibility.
Rizal referred to the row between the government and Bank Indonesia over which should be responsible for the huge spending after the Supreme Audit Agency found in an investigative audit last year that Bank Indonesia had improperly extended Rp 130 trillion of the loans and that Rp 80 trillion of that sum had been misused by recipient banks.
Rizal also disclosed that a number of senior officials and businessmen who acted as economic advisors to former president Soeharto were found morally responsible for the misuse of the huge loan funds.
Included among the officials and businessmen he cited are former presidents Soeharto and B.J. Habibie, Widjojo Nitisastro, Mar'ie Muhammad, Bambang Subianto, Soedradjad Djiwandono, Glenn Jusuf, Fuad Bawazier, Moerdiono, Mohamad 'Bob' Hasan, Sjahril Sabirin, Boediono, Ali Wardhana.
"The meeting found both professional misjudgement and abuse of power were responsible for the misuse of the emergency liquidity support,"
Sources told The Jakarta post last night that House Commission IX (finance and banking) would continue meeting until Monday because President Abdurrahman Wahid is to propose on Saturday to the House a list of candidates for the new central bank's board of governors.
The government had previously threatened to take back the treasury bonds it has issued to reimburse the central bank for the loans after the Supreme Audit Agency (BPK) found in an investigative audit last year that more than Rp 130 trillion of the credits had improperly been extended by the central bank.
Earlier in the morning President Abdurrahman Wahid reiterated his intention to replace the board of governors in a bid to clean up the central bank.
Bank Indonesia's senior deputy governor said on Wednesday the central bank was willing to bear Rp 24 trillion of the total emergency loans.
Analysts said Abdurrahman seemed to use the loan transaction as a way to force the reshuffle of the central bank management.
Some analysts have also expressed concern that the current controversy over the recapitalization plan of Bank Indonesia was another form of political interference by the President in the central bank.
The Central Bank Law does not stipulate that a management reshuffle is a precondition for the recapitalization of Bank Indonesia. The law only says that the government shall recapitalize the central bank if its capital drops to below the minimum Rp 2 trillion level.
"Because of the current high political temperature, people will think that if there's a change in the (BI) top management it is more political interference than a legitimate concern over the central bank's equity capital," said noted economist Sri Mulyani.
"If that happens, the financial market will think that the independent status of Bank Indonesia is now over," she added.
According to the Central Bank Law, enacted in May 1999, the board of governors are appointed by the House.
Since assuming office late last year, Abdurrahman has made it no secret that he wants a reshuffle in the Bank Indonesia board of governors.
But the President could not easily implement his intention, because according to the Central Bank Law, the members of the board of governors can not be replaced unless they are proven to have committed a crime, are incapacitated or voluntarily step down.
Bank Indonesia Governor Sjahril Sabirin was arrested in June as a suspect in the high-profile Bank Bali scandal and is now under house arrest awaiting trial.
Prior to his arrest, Sjahril had accused the President of political interference in the independent central bank by asking him to either step down or risk legal prosecution over his alleged involvement in the bank scandal. (rei)