DPR supports Texmaco loans from BNI
JAKARTA (JP): The House of Representatives (DPR) endorsed on Tuesday the almost US$1 billion in loans the publicly listed Texmaco Group obtained from state Bank BNI as normal business transactions.
House Commission IX for finance and budget concluded, after grilling Texmaco's management headed by company president Marimutu Sinivasan for almost three hours, that the loans obtained by Texmaco did not amount to preferential treatment because the facility was also available to other export-oriented companies hit by the economic crisis.
"Texmaco's business in textile and engineering is a national asset that should be helped to be competitive globally," Sukowalujo Mintorahardjo, chairman of the commission, said.
"This commission concludes that Texmaco was fully entitled to make use of Bank Indonesia's preshipment financing facility because if Texmaco were to default on its foreign loans it could have far-reaching repercussions on Indonesia's credit rating," Sukowalujo said, reading from a statement agreed upon by the commission.
The House summoned the Texmaco management following a disclosure by State Minister of Investment and State Enterprises Development Laksamana Sukardi at the House on Monday that former president Soeharto directly intervened to enable Texmaco to get $754 million and Rp 1.9 trillion in loans from the central bank through Bank BNI between November 1997 and February 1998.
"Texmaco should be considered a national asset and it is entitled to government assistance in time of crisis," said Theo Tumion, a legislator of the PDI Perjuangan (Indonesian Democratic Party of Struggle) faction, at the hearing.
Tumion conceded that favoritism seemed to have played a role in securing the deal, but he argued that the regulation was not tailor-made for Texmaco.
On Sunday, Bank BNI president Widigdo Sukarman also defended the Texmaco loans and the restructuring deal being negotiated as a normal business transaction.
Sinivasan, who started his textile business in the 1950s, briefed the legislators on the prospects of his widely diversified business and the problems it faced due to the economic crisis, especially the plunge of the rupiah's exchange rate against the American dollar from Rp 2,500 in 1997 to as low as Rp 17,000 last year.
He said the Texmaco loans surfaced as a controversy mainly because of misperception and the misreading of records on the loans.
"Laksamana's statement (on Monday) is not wrong but the records he got are not accurate and complete," Sinivasan said.
He said there was by no means any collusion or irregularity within the process through which Texmaco obtained the loans to survive the economic turmoil.
"I approached Bank Indonesia for a loan which in turn suggested that I write a letter to president Soeharto, which I did. What is wrong with that? Who else could I ask for assistance?" Sinivasan said.
He denied that he personally met with Soeharto, saying "I did not met with Soeharto. Nor do I have business with his children."
Moreover, he added, the loan facility already existed before Texmaco asked for it.
Sinivasan said the only outstanding problem loan to BNI was for $600 million, which he said Texmaco was working on restructuring through a package of a debt-to-equity swap and rollover deals.
Sinivasan said it was Bank BNI that proposed the debt-to- equity swap deal as the state bank apparently sought to cash in on potential gains in Texmaco after it listed its textile and engineering subsidiaries on the Nasdaq market in New York.
"We are determined to settle all of this (debt) in full without any reductions," Sinivasan added.
Texmaco plans to list two of its units on Nasdaq after reaching debt restructuring agreements.
Sinivasan said the group expected to sign a restructuring deal next week with foreign banks on $1.4 billion in loans to its polyester unit, publicly listed Polysindo Eka Perkasa.
Texmaco is a widely diversified group that produces textiles, garments, textile machinery, machine tools, synthetic fibers, rototillers and trucks.
Separately, Attorney General Marzuki Darusman said on Tuesday he would investigate the Texmaco loans and promised to handle the case properly.
He cautioned, however, that presumption of innocence must be upheld in handling the case.
Marzuki said that Laksamana had promised to provide him with documents related to the case.
In a related development, Laksamana said that President Abdurrahman Wahid supported his move to root out corruption in state enterprises, including state banks.
He explained that cleaning up Bank BNI as well as other state banks was very important. Bank BNI is expected to be recapitalized by the government at a total cost of Rp 52.8 trillion. (rei/prb/03)