BPK to audit debt-free status of former bankers
The Jakarta Post, Jakarta
The Supreme Audit Agency (BPK) said on Friday it would carry out an audit into assets surrendered by former bank owners to the government as repayment of debts.
BPK chairman Satrio B. Judono said that if the agency found irregularities, it would revoke the debt-free status given by the government to the former bank owners.
"We'll audit all (of the assets)," he said, while also replying "yes" when asked whether BPK would revoke the debt-free status if the audit found something fishy.
He did not say, however, when the audit would start.
The government has so far confirmed debt-free status for 13 former bank owners, including The Nin King, Sudwikatmono, Hendra Liem, Ibrahim Risjad, Anthony Salim, Hashim S. Djojohadikusumo, Njoo Kok Kiong, Honggo Wendratmo, Suparno Adijanto, Andy Hartawan, Ganda Eka Handria, Philip S. Widjaja and Mulyanto Tanaga.
Siti Hardianti Rukmana, Sjamsul Nursalim and Bob Hasan are also expected to soon follow suit, pending ongoing asset verification by the Financial Sector Policy Committee (FSPC), a grouping of senior economic ministers.
The government channeled some Rp 144.5 trillion (US$16.9 billion) in funds to troubled banks during the late 1990s financial crisis. A BPK audit later found out that most of the funds had been abused by bank owners, including for currency speculation and lending to affiliated businesses. The former bank owners have also been charged with violating the legal lending limit by channeling most of their banks' money to affiliated companies, thus hurting the banks and forcing the government to bail them out.
After years of negotiation, some former bank owners finally agreed to repay the debts by surrendering a combination of assets and cash. The government promised them debt-free status if they were deemed cooperative in repaying their debts.
The status would allow the debtors to remain immune from criminal indictment for violation of banking regulations in the past.
According to the Indonesian Bank Restructuring Agency (IBRA), which was assigned to collect the assets and sell them to raise cash for the government, many of the assets surrendered by the former bank owners have had a low recovery rate of around 28 percent, meaning that taxpayers will have to cover the remaining burden.
IBRA was closed down in February after more than six years in operation.
Both IBRA and the government have been strongly criticized for granting debt-free status to former bankers, and for failing to fully recover the state funds.
But the BPK audit plan may provide a glimmer of hope that justice might finally prevail.
On the other hand, it could also further erode confidence in the government for its lack of commitment to providing certainty in the execution of its own policies.