Govt urged to declare nation's top debtors

Govt urged to declare nation's top debtors

JAKARTA (JP): The government should announce the names of the
nation's top debtors and investigate if they were involved in
improprieties which have brought the country's banking industry
to its knees, a senior banking analyst said Monday.

"Nobody dared to name the debtors and investigate them in the
past, but the government should do that now," said Thomas
Suyatno, a former executive of the Federation of Indonesian
Private Banks (Perbanas).

Bank Indonesia, the central bank, has said several times that
it had checked the quality of credits channeled to the country's
50 top debtors, but it never disclosed their names or the results
of its study.

Thomas said in its current efforts to restructure the
country's banking industry, the government should also thoroughly
check the total credit channeled by the banks to them and the
amount of the debts which ultimately became bad.

If proof surfaced of improprieties, the government should take
action against the suspects in accordance with the law.

"Thus far, the government appears to be focusing on
(investigating) negligent bankers and letting the creditors who
also took part in putting the country's banking industry into
trouble walk free," Thomas was quoted by Antara news agency as
saying.

Law enforcement agencies, including the Attorney General and
the police, have questioned several bankers for allegedly
misusing the liquidity support given by the central bank to their
respective institutions and for violating the legal lending
limit.

The Attorney General last week started questioning several
bank officials and owners, including Mohamad "Bob" Hasan, the
long-time golfing partner of former president Soeharto.

The central bank is believed to have channeled Rp 140 trillion
(over US$12 billion) in liquidity support to commercial banks to
help them weather the monetary crisis which has been battering
the nation for more than a year.

The police have also summoned executives and owners of Bank
Andromeda, including Soeharto's son Bambang Trihatmodjo, for
questioning on charges of violating the legal lending limit. The
bank was among the 16 banks which were liquidated in November
last year.

A senior executive of the Indonesian Bank Restructuring Agency
(IBRA), Farid Harianto, said last month the major obstacle faced
by the agency in restructuring the country's ailing banks was the
huge amount of nonperforming loans.

The loans were estimated to reach Rp 376 trillion as of June
this year, accounting for 48 percent of the total commercial
banks' credit of Rp 626.5 trillion.

IBRA, which was set up in January to restructure ailing banks
and recover the central bank's liquidity support, has established
the asset management unit (AMU) to absorb nonperforming loans.

But Farid, who heads the unit, said that recovering bad loans
would not be easy because of conflicting interests in the
government and legal impediments to the sale of troubled banks'
assets. (jsk)