Ex-bank owners agree to surrender more assets

Ex-bank owners agree to surrender more assets

JAKARTA (JP): Three former bank owners agreed on Wednesday to
surrender additional assets and provide personal guarantees to
the Indonesian Bank Restructuring Agency (IBRA) to repay their
debts to the government.

Attorney General Marzuki Darusman said the ex-bank owners,
Anthony Salim, Bob Hasan and Sjamsul Nursalim, submitted lists of
the additional assets they would surrender.

"They have principally agreed to pledge more assets and
provide personal guarantees," Marzuki said following a meeting of
the Financial Sector Policy Committee (FSPC).

He said IBRA would study the assets and decide whether they
were sufficient to cover the obligations of the former bank
owners.

"For the time being, the ex-bank owners are being
cooperative," he said.

Anthony is the owner of the Salim Group, which formerly
controlled Bank Central Asia (BCA). Sjamsul owns the Gadjah
Tunggal Group, which owned the now defunct Bank BDNI, and Hasan
was the co-owner of the now defunct Bank BUN.

FSPC, which groups senior economic ministers and the attorney
general, earlier gave the former bank owners until Wednesday
evening to agree to surrender additional assets and provide
personal guarantees or risk legal sanction.

The committee decides key transaction made by IBRA.

A government source, however, said FSPC initially expected the
ex-bank owners to attend the meeting personally, but instead they
only sent a letter to the committee.

The source said that since the letter did not have a strong
legal basis, the ex-bank owners had been told to come to the
office of the coordinating minister for the economy on Friday to
sign a legally binding document.

The former bank owners, who are among the country's top
business tycoons, owe hundreds of trillions of rupiah to the
government after their banks received massive liquidity support
between 1998 and 1999, during the height of the country's
financial crisis. The banks also violated the legal lending limit
by channeling most of their money to affiliated business groups.

The tycoons signed the Master of Settlement and Acquisition
Agreement (MSAA) in 1999 with IBRA, under which they pledged
assets to repay their debts to the government.

But the pledged assets were not sufficient to cover the debts.
Former chief economic minister Kwik Kian Gie was the first to
demand the MSAA be revised.

The Salim Group, for example, owes the government
approximately Rp 53 trillion, but the assets it surrendered were
valued at about Rp 20 trillion.

Following a Cabinet reshuffle, the new economic team demanded
the former bank owners surrender additional assets and provide
personal guarantees that they would make good on their debts.

But the business groups initially attempted to resist these
new demands by lobbying government officials and legislators.

"They think there are government officials that can be
bought," Coordinating Minister for the Economy Rizal Ramli said
recently.

Rizal said the Attorney General's Office had conducted an
investigation and found that the conglomerates still owned
numerous assets both in Indonesia and overseas.

In addition to the three ex-bank owners, businessman
Sudwikatmono also signed the MSAA agreement.

But Marzuki said Sudwikatmono, the brother-in-law of former
president Soeharto, was not among the ex-bank owners who had been
given the Wednesday deadline to pledge additional assets.

"The government is currently focusing on the three
conglomerates," Marzuki said.

A government source said Sudwikatmono was not included with
the three other ex-bank owners because his bank had not violated
the legal lending limit. (rei)