Ex-bank owners declared debt free

Ex-bank owners declared debt free

The Jakarta Post, Jakarta

Four ex-bank owners will soon be declared free of debt by the
government after the powerful Financial Sector Policy Committee
(FSPC) decided late on Wednesday that they had fully repaid their
debts to the state.

FSPC secretary Lukito D. Tuwo told reporters that the former
owners of the now defunct banks included The The Min (Bank
Hastin), Husodo A. (Bank Sewu), The Nin Kong (Bank Baja), and
Nirwan D. Bakrie (Bank Nusa Nasional).

Lukito was speaking after a meeting of FSPC, which groups
senior economics ministers.

The Indonesian Bank Restructuring Agency (IBRA) is expected to
immediately grant them debt-free status following the green light
from FSPC. IBRA was officially closed down late last month, but
a skeleton staff is still helping to finalize some cases and will
do so until the end of April.

The status will also free the ex-bank owners from any legal
action for possible banking crimes committed in the past.

To date, IBRA has given debt free status to nine ex-bank
owners, including Anthony Salim, the former owner of Bank BCA and
the largest debtor, who received the status last week.

The government injected Rp 144.5 trillion (currently
equivalent to some US$17 billion) in emergency liquidity funds to
many banks to bail them out in the wake of the late 1990s
financial crisis. But some 35 bank owners have been charged with
violating banking regulations, mainly by channeling their
depositor's money to affiliated business groups, a crime that led
to the collapse of the banks and forced the government to bail
them out, as well as later misusing the emergency liquidity
funds.

To repay their debts, the bank owners surrendered a
combination of cash and assets to IBRA. But it has taken the
agency several years to verify and calculate the value of those
assets, many of which turned out to have much less market value
than earlier claimed. The agency, for instance, collected around
Rp 20 trillion from the sale of shares in 108 companies
surrendered by Salim to pay off his Rp 52.7 trillion debt to the
state.

Meanwhile, Lukito said FSPC had not recommended that the
former owner of now defunct Bank BDNI Sjamsul Nursalim be
declared debt-free, despite IBRA's report that the businessman
has settled his obligation. Lukito said that there were still
legal hold-ups in Sjamsul's case.