Thu, 09 Nov 2000

BPK begins investigative audit on IBRA's assets

JAKARTA (JP): The Supreme Audit Agency (BPK) has started an investigative audit into the Indonesian Bank Restructuring Agency (IBRA) to assess the value of the agency's assets and their condition, according to head of the House of Representatives Commission IX on state budget and finance, Benny Pasaribu.

Benny said Wednesday that the audit was expected to be completed in three months.

"We have asked BPK to complete the investigative audit in three months. The audit started this week," he told reporters at the sidelines of a hearing between Coordinating Minister for Economic Affairs Rizal Ramli and legislators.

The House ordered BPK to conduct the investigative audit late last month.

Benny said that the investigative audit was needed because there was confusion over the real value of the IBRA assets.

"Some say the total is about Rp 600 trillion (US$66 billion) but others say it is much less than that. We want to know the real figure, so we asked BPK to conduct an audit," he said.

A financial audit was conducted in June this year by a private accounting firm but the later issued a "disclaimer" opinion because it could not obtain sufficient information.

IBRA, a unit of the finance ministry, received the assets from closed banks, recapitalized banks and former bank owners as repayment of debt owed to the government.

The assets, estimated by the agency to be worth more than Rp 600 trillion, include non-performing bank loans, fixed assets and shares in various companies. The agency must sell the assets, and in some cases restructure them first.

But many have said that the real value of the assets were much less than what had been estimated by the agency.

Former chief economic minister Kwik Kian Gie, for example, said that the assets transferred by the Salim Group were only worth about Rp 20 trillion compared to more than Rp 53 trillion estimated by IBRA.

The Salim Group pledged various assets to repay Rp 53 trillion debt owed to the government for the massive liquidity support injected into Bank Central Asia (BCA). The group is the former owner of the nationalized bank.

The government, via Bank Indonesia, injected massive amounts of liquidity supports, popularly called BLBI, between 1998 and 1999 to help ailing banks repay depositors amid massive bank runs.

The former bank owners must repay the BLBI facility.

IBRA signed an agreement called the Master Settlement and Acquisition Agreement (MSAA) with several former bank owners last year, under which the conglomerates would transfer assets to repay their obligations. But it turned out that the value of the assets were insufficient to cover their obligations.

The current administration is now demanding the former bank owners transfer more assets to IBRA.

Another controversy relating to IBRA's assets is the current dispute between the government (the finance ministry) and Bank Indonesia over the BLBI facility.

The government was supposed to issue bonds to the central bank to fully cover the BLBI facility, but after BPK revealed recently that most of the facilities had been abused by recipient banks, particularly due to weak supervision by the central bank, the government has demanded Bank Indonesia share the burden.

According to BPK, some Rp 138 trillion out of the Rp 144.5 trillion was abused.

Bank Indonesia has declined to accept such a huge burden. BI said that the government should take the burden because the BLBI facility was a government program and IBRA had received assets from the former bank owners in return for the facility.

The government and Bank Indonesia have formed a special team to settle the dispute.

Benny said that the investigative audit would contribute to resolving both problems.

Separately, Rizal said that he would meet with the bank owners who signed the MSAA on Friday to push them to agree to transfer more assets and provide personal guarantees. (rei)