Ex-bankers given deadline to surrender more assets

Ex-bankers given deadline to surrender more assets

JAKARTA (JP): The government has given the country's prominent
former bank owners until Wednesday to agree to surrender more
assets and provide personal guarantees to the Indonesian Bank
Restructuring Agency (IBRA) to ensure full settlement of their
obligations.

Coordinating Minister for the Economy Rizal Ramli said late on
Friday that the ex-bank owners would risk legal sanctions if they
failed to meet the government's demand.

"The deadline is until Wednesday at seven in the evening... If
this is not met, the Attorney General has confirmed that he would
take necessary action," Rizal told a press conference following a
meeting of the Financial Sector Policy Committee (FSPC).

The FSPC is a group of several senior economics ministers,the
Attorney General and IBRA. The committee gives the final approval
on major deals handled by IBRA.

The former bank owners, who are also the country's top
business tycoons, owe hundreds of trillions of rupiah to the
government because their banks had received massive liquidity
support from the government via the central bank. They had also
violated the legal lending limit ruling by channeling most of
their money to affiliated businesses.

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

But it turned out the assets surrendered were not sufficient
to cover their obligations.

The former bank owners include the Salim Group, Sjamsul
Nursalim, Bob Hasan and Sudwikatmono.

The Salim Group, for instance, owed more than Rp 53 trillion
to the government but the assets it pledged are only worth around
Rp 20 trillion.

"We have given them one month ... We will not give them more
time because it's useless. They only use it to lobby government
officials or legislators to avoid (surrendering more assets),"
Rizal said.

"They think there are government officials who can bought, but
the current (economic) team won't accept bribe," he added.

Rizal said the Attorney General's office had conducted an
investigation and found out that the former bank owners still had
assets, both domestic and overseas.

"It turns out that they're not as poor as they had claimed,"
he said.

Rizal said if they do not accede to the government's demand,
they would be categorized as uncooperative debtors and would risk
legal sanctions.

"We define the uncooperative debtors as those who only cause
the state further losses," he said.

Rizal also said the former bank owners would be allowed to
repurchase their assets from IBRA only after they have fulfilled
their obligations to the government.

"They are welcome to buy back the assets if they have met
their obligations," he said.

He said there were strong indications that the former bank
owners were trying to repurchase their assets via third parties.

"If in the future they are proven to have repurchased their
assets, IBRA will take them back," he said, without elaborating.

The government was disappointed in learning that the Salim
group had repurchased its shares in the Singapore-listed QAF Pte.
Ltd., a holding company operating various businesses including
bread-making, supermarkets and trading.

IBRA had sold all of its 25 percent share in QAF earlier this
week through BNP Paribas Peregrine as the placement agency.
However the shares were bought by an investment firm owned by the
Salim Group and Didi Dawis, the president of QAF.

The QAF shares were among the assets pledged by the Salim
Group.

Rizal had said earlier that the repurchasing of QAF shares by
Salim was "unethical" because the group had not fulfilled their
obligations to the government.

Rizal said Salim should have prioritized its debt to the
government and not the repurchasing of their assets.

Separately, IBRA senior official Dasa Sutantio said the agency
had warned BNP Paribas not sell the QAF shares to the Salim
Group.

But BNP Paribas argued that out of the 21 fund managers
invited, one sold the QAF shares back to the Salim Group's
affiliate, Dasa said. (rei)