Govt to audit Texmaco's assets

The Jakarta Post Jakarta

The government will audit textile maker Texmaco Group to check whether it had properly used the loans provided by state banks.

The audit comes as the government mulls whether to bail out, break up or sell the group which missed a payment of its debt in August this year.

"The IBRA (Indonesian Bank Restructuring Agency) will, in the near future, conduct the audit to see where the loans went," Minister of State Enterprises Laksamana Sukardi said at the State Palace after accompanying several leaders of state owned enterprises in meeting with President Megawati Soekarnoputri.

The audit also aims to see whether the company's debts "correspond with the value of Texmaco's machinery."

Last year, Texmaco agreed to restructure its Rp 29 trillion (about US$3.4 billion) debt. In August this year, it missed the Rp 139 billion interest payment, according to reports which were confirmed by IBRA.

Founder Marimutu Sinivasan has asked the government to bail out the company, but the government thus far has yet to make a decision.

According to Laksamana, the government has been eagerly looking to sell the firm but no investors have shown adequate interest. In the meantime, the closure of the firm would lead to the dismissals of more than 40,000 workers at a time of rising unemployment.

In July, IBRA failed in an attempt to sell Texmaco's debt and shares after Malaysia's Utara Capital Ltd., a group led by the eldest son of Malaysian Prime Minister Mahathir Mohamad, and China National Bluestar Corp., a state-owned enterprise, didn't submit final bids by the deadline.

"Even with the five cent (price tag), no one is interested in buying," Laksamana said.

In response to Laksamana's statement, Nina Larasati of Texmaco's corporate communications said as far as the firm knew, IBRA had never offered the firm's assets at that price.

She also said IBRA had appointed an independent consultant to conduct a "due diligence audit" on Texmaco's assets. The audit has been completed and was accepted by IBRA.

Nina insisted that Texmaco's machinery was imported from Western Europe and the Ministry of Research and Technology is conducting a technology audit on Texmaco's machinery.

Texmaco was founded by Marimutu Sinivasan, a businessman of Indian descent. Sinivasan was one of the few successful non Chinese-Indonesian businessmen during the Soeharto era.