Govt to audit Texmaco's assets

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.