Govt allows itself to be cheated?

Govt allows itself to be cheated?

From Kontan

Many people believe that the state will sustain losses if it goes ahead with its plan to sell its shares in Bank Lippo. In response to this, the chairman of the Indonesian Bank Restructuring Agency (IBRA) quickly stated that he would never allow losses to the state to be incurred as man lives only once. He is quite right because nobody lives twice. And it may also be correct that he will not inflict losses on the state. The question is whether the same will apply to the people around him. Even a kindergarten child can see that you inflict a loss if you sell a Rp 300 toy at Rp 50 or Rp 100.

Of course, the public at large cannot read confidential legal documents with high-sounding titles like IMPAs, let alone understand their contents. What they want to know is why things have been so easily arranged. Why must the government, which has spent huge amounts of money, reduce these amounts when it is time for the money to be repaid. Or, even to the extent of allowing the borrowers not to return the money at all. This is strange but true.

It is stranger that a country with a lot of clever people does not have lawyers or legal counselors as smart and reliable as those working for the companies that have borrowed huge amounts of money from the government. As a result, simple agreements have been rendered confusing.

The agreements should have contained clauses stipulating that if the government wished to sell the shares under its control, the former owners would be obligated to purchase the shares at a price equal to the amount of money the government has spent. If possible, a clause on compensation should be included.

Actually, an agreement based on the IMPA model is one ordinarily made under the name of a transaction agreement with a right of repurchase. The question is why these IMPAs are drawn up, plus amendments and supplements, in a manner which obviously does not protect the rights of the government.

TAUFIK KARMADI

Jakarta