Govt could be sued over R&D uproar
Dadan Wijaksana, The Jakarta Post, Jakarta
As controversy over the government's plan to let cooperative debtors off criminal charges continues, the Legal Aid Institute (LBH) said on Monday that a class action against such a policy might be considered an option.
LBH Chairman Munarman told The Jakarta Post that the action could be a good way of protecting the interests of the public.
"As a breakthrough in the due process of the law, a class action could be used to deal with this (problem)," Munarman said on Monday, adding that the plan to let the debtors walk free from criminal litigation was the latest example of a public lie created by the government through its policies.
The Cabinet decided last week to free former bank owners deemed cooperative in settling their debts to the state from past banking crimes. A presidential directive for the "release and discharge" (R&D) status of the debtors is currently being prepared.
Among the ex-bank owners reportedly to be granted R&D status are Sudono Salim (former owner of Bank BCA), Ibrahim Risyad (Bank RSI), Sudwikatmono (Bank Subentra and Bank Surya), Hendra Liem (Bank Budi International) and The Nin King (Bank Danahutama).
They are part of the total of 35 ex-bankers whose banks received some Rp 144.5 trillion (about US$16 billion) of state- funded liquidity support loans injected into the banking sector during the late 1990s financial crisis.
Aside from breaking the legal lending limit ruling for banks, which contributed to the banking crisis, many of the former bank owners have been accused of misusing the loan facility by channeling the funds to affiliated business groups or using them for speculation against the rupiah.
The government has argued that the R&D policy is needed to maintain legal certainty as it was part of the debt settlement schemes signed by the former bank owners with the previous government. Under the agreements, the debtors would settle the debts via cash, assets or a combination of both.
But critics have said that most of the assets surrendered to the state are rapidly decreasing in value, causing the government to suffer huge losses if they are sold. This, in turn, would force taxpayers to shoulder a much greater burden of the cost of the banking crisis.
The Indonesian Bank Restructuring Agency (IBRA), for instance, which has sold most of the assets surrendered by Salim, could raise only some Rp 28 trillion, compared with Salim's debts of more than Rp 52 trillion. Salim is the largest debtor.
What has made it worse, however, was a recent revelation that the amount of debt established under the first agreement covered the principle alone, not the interest.
Elsewhere, Munarman called on the House of Representatives to jump to the public's defense, "as the House is a legitimate institution set up to fight for the people it represents.
"And if the House requests LBH to file a class action against any government policy to free debtors from criminal prosecution, we'll be ready."
Earlier, economists also urged the government not to allow debtors to walk free from criminal charges, in order to avoid a backlash from the public in the future.