Government warns corrupt ex-bank owners of legal sanctions

Government warns corrupt ex-bank owners of legal sanctions

JAKARTA (JP): Coordinating Minister for the Economy Rizal
Ramli said on Tuesday that legal action would be taken against
former bank owners who are deemed "uncooperative" in settling
their debt to the government.

Rizal said on Tuesday that the government had agreed to extend
the repayment period of the debt, but in return the former bank
owners must provide personal guarantee and inject additional
assets in case the assets which had been previously surrendered
were insufficient to cover the debt.

"If we fail to negotiate ... then we will hand over the case
to the Attorney General Office," Rizal said in a press conference
following a meeting with House of Representatives top
legislators.

He also said it was very important that concrete policy be
immediately taken to resolve the debt problem of the former bank
owners because a further delay would only increase the cost of
the country's bank restructuring program.

"We must take action immediately or there will be an
additional cost due to the indecision," Rizal said.

The meeting was the final consultation between the government
and the House over plans to revise the controversial master of
settlement and acquisition agreement or MSAA.

The MSAA was formulated by the previous government of B.J.
Habibie and several former bank owners last year. Under the
agreement, the former bank owners who are also powerful business
tycoons would surrender assets to repay the trillion of rupiahs
in emergency liquidity support injected by the government to
bailout the banks during the country's worst financial crisis.

But it turned out that the assets surrendered by the business
tycoons were not enough to cover the banks' debts. Under the
MSAA, they were not required to cover the deficit.

This has prompted the previous economic team led by Kwik Kian
Gie to ask the House to provide support to revise the MSAA.

The indebted powerful business tycoons included businessmen
Mohamad "Bob" Hasan, Sjamsul Nursalim and Anthony Salim.

Many of the businessmen are believed to have also forced their
banks to lend most of the banks' money and the government
liquidity support to affiliates which led to the violation of
bank legal lending limit ruling.

Under the initial MSAA, there is a "release and discharge
clause" allowing the business tycoons to be freed from legal
sanction although they have violated the legal lending limit
ruling as long as they repay their obligation to the government.

But there is now strong pressure for the government to also
revise this part of the MSAA so that violation of the legal
lending limit must be given legal sanction although the business
tycoons had surrendered enough assets.

Both Rizal and Attorney General Marzuki Darusman failed to
give a clear answer whether the government would drop the release
and discharge clause.

"I'm not a legal expert" Rizal responded when asked by the
press.

Marzuki also gave a long but unclear answer to the same
question.

House Speaker Akbar Tandjung said that what was important was
that the government had (partly) revised the MSAA to ensure a
minimum loss to the state.

"The House will support any action taken by the government as
long as it is intended to minimize the potential loss to the
state," Akbar said.

Meanwhile, legislator Paskah Suzetta who also attended the
meeting said that there seemed to be disagreement among
government officials over the MSAA issue.

He did not clarify whether the disagreement centered on the
issue of release and discharge clause.

Chairman of the Indonesian Bank Restructuring Agency (IBRA)
Cacuk Sudarijanto, and Finance Minister Prijadi Praptosuhardjo
also attended the meeting. (rei)