Eight more debtors get debt reprieve

Eight more debtors get debt reprieve

Dadan Wijaksana, The Jakarta Post, Jakarta

The government has agreed to forgive the debt of eight former
bank owners to the tune of US$70 million, which could protect
them against criminal charges in the future, despite the fact
that the taxpayers have failed to recoup the bailout funds
provided to them.

The decision was made on Wednesday by the Financial Sector
Policy Committee (FSPC), a powerful grouping of senior economic
ministers, based on recommendations from the Indonesian Bank
Restructuring Agency (IBRA).

IBRA will officially give the eight ex-bankers letters
attesting to their debt-free status.

"It's up to IBRA when it will issue those letters," FSPC
secretary Lukita D. Tuwo announced on Wednesday after their
meeting.

The debtors are Hashim S. Djojohadikusumo, Njoo Kok Kiong,
Honggo Wendratmo, Suparno Adijanto, Andy Hartawan, Ganda Eka
Handria, Philip S. Widjaja and Mulyanto Tanaga who have a
combined debt of more than Rp 600 billion (over US$70 million)

The first three are the former owners of Bank Papan Sejahtera
with a combined debt of Rp 433 billion. The others are the former
owners of small banks Bumi Raya Utama, Baja Internasional,
Sembada Arthanugraha, Mashill and Indotrade.

They will add to the already long list of debtors who have
been declared "cooperative" and given the debt-free status.

While currently only Sudwikatmono and The Nin King, who had
officially been granted the debt-free status, four others (Hendra
Liem, Ibrahim Risjad, Siti Hardijanti Rukmana and Anthony Salim)
are expected to follow soon as all have been deemed as
cooperative by IBRA.

Of the six, only Siti Hardijanti who is yet to secure FSPC's
approval, pending further verification on the assets she had
surrendered to IBRA.

Anthony Salim was the former owner of Bank Central Asia, Siti
H. Rukmana (Bank Yama), Liem (Bank Bumi Internasional), The Nin
King (Bank Dana Utama), Ibrahim (Bank Risjad Salim) and
Sudwikatmono (Bank Surya and Subentra).

All are among 39 bank owners who received Rp 144.5 trillion in
bail-out funds from the government during the crisis. Most of
them were later accused of having misused much of the funds by
channeling the money into affiliated businesses -- considered a
crime under the banking law.

To avoid criminal indictment, they signed a debt settlement
scheme with IBRA, allowing them to settle debts via cash and
assets. But, as it later turned out, the assets produced
insufficient proceeds for the state, leaving the cash-strapped
state budget to bear the burden of the shortage and passing it on
to taxpayers.

IBRA has said the recovery rate of those assets was less than
30 percent.

Meanwhile, IBRA has also set a two-week deadline for 11 APU
debtors to top up the shortfalls of their debt repayments, or
risk being labeled uncooperative and face litigation.

The warning was handed out directly to the former bankers
during a meeting with IBRA, said Taufik Ma'roef, the agency's
deputy chairman.

IBRA was set up in 1998 and is scheduled for termination on
Feb. 27.

11 debtors told to cover debt shortfall
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Debtors Bank Debt

(Rp)
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Nirwan D. Bakrie BNN 3.4 trillion
Marimutu Sinivasan Putera Multikarsa 1.3 trillion
The The Min Hastin 134 billion
Husodo A. Sewu 209 billion
Adisaputra J. Namura Yasonta 410 billion
The Nin Kong Baja 45 billion
Atang Latief Bira 325 billion
Omar Putihrai Tamara 190 billion
Lidia Muchtar Tamara 202 billion
Iwan Suhardiman Tamara 35 billion
Ulung Bursa Lautan Berlian 615 billion
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Source: The Jakarta Post's files