Government to disclose OC findings on debt restructuring

JAKARTA (JP): An independent oversight committee (OC) has finalized its review on major corporate debt restructuring deals hammered out by the Financial Sector Policy Committee (FSPC), but OC's findings will only be made public after the new economic team has been formed, a senior government official said on Tuesday.

Assistant to the Coordinating Minister for the Economy Dipo Alam said the caretaker Cabinet did not have the authority to announce the OC's findings.

"It wouldn't be ethical if we announced the results now ... the results could influence sentiments toward our economy," Dipo said at his office.

The OC said earlier it found weakness in the restructuring of corporate debts that the FSPC had approved.

They included the restructuring deals of PT Chandra Asri, Tirtamas Group, PT Seamless Pipe Jaya and PT Permadani Khatulistiwa Nusantara.

According to the OC's chairman, Mar'ie Muhammad, the four deals have not been in line with corporate restructuring principles introduced by the FSPC itself.

He expected the FSPC to follow up on the OC's findings, although the latter's recommendations were not binding.

The OC is also reviewing dozens of other corporate debt restructuring deals.

FSPC is in charge of restructuring major corporate debts under the Indonesian Bank Restructuring Agency (IBRA). FSPC groups several senior economics ministers. However, FSPC's work has often been criticized, particularly because the restructuring deals seem to be in favor of influential conglomerates.

Dipo refused to disclose the deals the OC had reviewed, saying they were, as yet, confidential.

He said the OC handed over last Monday its findings to FSPC chairman Burhanuddin Abdullah who was also the outgoing coordinating minister for the economy.

Announcing the OC's review findings to the public is also a precondition for the signing of the next letter of intent (LoI) with the International Monetary Fund (IMF), he added.

According to Dipo, the government had promised the IMF that it would announce the results by the end of last month.

The announcement should have also included a business plan of IBRA asset sales and debt restructuring programs, he said.

The government must also announce the progress in its privatization program, Dipo said.

The announcements are part of the six preconditions for the signing of the LoI , he said.

He said the other preconditions were explanations on the government's fuel subsidy, the central bank's base money and inflation targets, and the acquisition scheme of PT Bank Internasional Indonesia by state Bank Mandiri. (bkm)