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.