Gus Dur's brother decides to quit IBRA, says Cacuk

Gus Dur's brother decides to quit IBRA, says Cacuk

JAKARTA (JP): President Abdurrahman Wahid's younger brother
Hasyim Wahid has resigned from the powerful Indonesian Bank
Restructuring Agency (IBRA), the agency's chief said.

"Yes, that is true. But he has yet to officially submit a
letter of resignation," IBRA chairman Cacuk Sudarijanto said in
response to queries from reporters before a meeting with
Abdurrahman, who is also known as Gus Dur.

"The reason for his resignation is because (his presence) is
no longer effective. His duty was originally to help me in this
field."

Hasyim Wahid, known as Gus Im, joined IBRA in December as an
"expert adviser" to help the agency force recalcitrant debtors to
repay their debts or enter serious negotiations on debt
restructuring.

His position, which was only recently confirmed to the media,
fanned accusations of nepotism.

There also were fears Gus Im would use his position to raise
funds from indebted conglomerates for the President's political
interests.

The President denied the allegations last week, asserting that
he had no plans to ask his brother to resign from the agency
because he was "clean and honest".

IBRA controls some Rp 600 trillion worth of assets, including
more than Rp 200 trillion worth of nonperforming loans taken over
from nationalized, closed down and recapitalized domestic banks.

Gus Im was assigned to a special division at IBRA called the
asset forensic division, with duties including the tracing of the
assets of bad debtors which might have been concealed or sold
overseas.

He liked to describe his role as an arm-twister for bad
debtors.

The agency has faced difficulties in collecting loans from bad
debtors and having debtors enter debt-restructuring talks in good
faith.

In a new letter of intent signed with the International
Monetary Fund last week, the government pledged that IBRA would
reach several major restructuring deals this year with the top 21
obligors. They account for 36 percent of the total debts under
the agency's management.

Many analysts have said that IBRA is vulnerable to abuse or
political intervention due to the huge amount of assets under its
control.

The plans to impose a new law which would allow IBRA to
directly report to the President have further increased the
concern of political intervention.

Economist Sri Mulyani said that although the new structure
might help IBRA to accelerate its asset disposal program, the
move could make the agency vulnerable to abuse by the President
himself.

"But the problem is that the President has been very
dominating in the decision-making process here ... Past
experiences have showed that intervention often came from the
President."

Sri explained that intervention by the President would
undermine the professional judgment of IBRA.

"The President (Gus Dur) has no technical competence and
authority."

She said the debt-restructuring decision of giant
petrochemical firm PT Chandra Asri made by the President recently
was an example of such political intervention which caused a
negative image for IBRA and Indonesia.

"I can't understand why a president who doesn't understand
economics was given the authority to make a technical decision on
such matters as the Chandra Asri case," said Sri, who is also the
secretary-general of the National Economic Council, which advises
the President on economic issues.

The President reached an agreement with Japan's Marubeni
company last week to restructure Chandra Asri's debt through a
debt to equity swap mechanism. Under the deal, the government
ended up owning 80 percent of the company, while Marubeni, which
is the company's major foreign creditor, held 20 percent.
(rei/cst)