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)