Govt told to probe criminal aspects of debt-ridden firms

JAKARTA (JP): Economist Kwik Kian Gie criticized the government's handling of debt-ridden companies, saying it has failed to tackle the criminal aspects.

He criticized the government's handling of the Kanindo textile group, in which it's only apparent concern is with the group's operational stability, while the possible criminal aspects have been left untouched.

"I think it's legitimate for the people to ask why the government does not want to open up the criminal aspects of Kanindo's case, like what has happened with the Golden Key Group," Kwik remarked.

Kanindo Success Textile, a subsidiary of the Kanindo Group, is Rp 500 billion (US$238 million) in debt to two state-own banks, Bank Bumi Daya (BBD) and Bank Pembangunan Indonesia (Bapindo).

The government has formally appointed the Federation of Indonesian Batik Cooperatives (GKBI) to take over the management of Kanindo for a three-year period. The new management is assigned to improve its liquidity to enable it to settle its debts.

However, there has been no government investigation into how Robby Tjahjadi, the owner of Kanindo Group, received such a huge amount of credits from the two state banks to finance his business in the first place, Kwik said.

Collusion

"Is there evidence of collusion, corruption, mark-up of assets, letters of recommendation from politically strong men that smoothed the disbursement of the credits?" Kwik asked.

Robby is reportedly still at large abroad. "I think Robby will not come back here since he has enough cash to live abroad," Kwik said.

Kwik reminded that if the handling of debt-ridden companies does not touch on the criminal aspects, other debt-ridden companies might follow the same scenario because at least 32 companies also have debt problems, including Golden Key and Kanindo.

Kwik questioned the government's recent move to tackle bad- debt problems at state-banks by asking the owners of debt-ridden companies to make new proposals.

The banks then approved a number of proposals, asking that the interest of the debts be written off for a certain period of time, he said.

He suggested that the government take tougher actions against the debt-ridden companies, or else risk losing more money because the companies got the credits from state banks.

"If I may make a suggestion, the government should bring the owners of debt-ridden companies to court to unveil the way they got the credits and who is behind them," Kwik said.(rid)