House to grill IBRA over alleged graft in loan asset sale
House to grill IBRA over alleged graft in loan asset sale
Dadan Wijaksana, The Jakarta Post, Jakarta
The House of Representatives is set to grill the Indonesian Bank
Restructuring Agency (IBRA) in the next few weeks over alleged
irregularities in its massive loan asset sale.
"We'll invite IBRA to a hearing next month to ask for an
explanation over these allegations concerning the debt sell-off,"
Faisal Baasir, deputy chairman of the House budget committee,
told The Jakarta Post on Wednesday.
The agency has just completed the sale of some Rp 135 trillion
(US$15 billion) worth of bank non-performing loans (NPL), with
the total proceeds expected to be officially announced sometime
this week. It has been widely expected that the sale program
would bring in between Rp 20 to Rp 23 trillion for the treasury.
IBRA took over the NPLs from ailing banks during the late
1990s financial crisis.
Accusations of irregularities, however, have been on the rise
with the public questioning not only the modest recovery rates,
but also the level of transparency involved.
The massive debt sale, comprising around 2,500 loan
portfolios, has allegedly been corruptly manipulated by various
parties for their personal gain.
The recent revelation that one of the winning bidders was a
company whose chief executive was a relative of Mohammad
Syahrial, the deputy chairman of IBRA's Asset Management Credit
(AMC) division, which is in charge of the sale program, has
raised concerns of corruption in the organization.
A denial by the official that irregularities had taken place
-- he argued that the sale process had been carried out in
accordance with the set mechanisms -- seems to have failed to
calm the rumors.
Also rife are allegations that IBRA officials are acting as
go-betweens for former debtors wishing to buy back their debts at
huge discounts.
Due to the flood of allegations, analysts have urged the
government to launch an investigation into the matter, and if
indications of irregularities are found, the transactions
involved should be annulled.
Kwik Kian Gie, the outspoken State Minister for National
Development Planning, recently joined in the chorus of criticism,
saying that the sales were marred by irregularities.
Kwik pointed out as an example that some IBRA officials had
sold information on the floor price of the assets to be sold.
"The information on the floor prices was sold by IBRA
officials for Rp 15 million. I know it for sure," he was quoted
as saying by the Koran Tempo daily on Tuesday.
Kwik therefore called for the sale program to be reviewed in
order to avoid more losses on the part of the government.
IBRA controls over Rp 600 trillion worth of assets transferred
by indebted bank owners, closed-down banks and recapitalized
banks, and is mandated to restructure and sell the assets to
raise cash.
Addressing such calls, Faisal reiterated that the House had
the authority to ask the Supreme Audit Agency (BPK) to conduct an
investigative audit of IBRA and its debt sale process.
"And if evidence is found, the agency can ask law enforcers,
including the police and prosecutors, to investigate further,"
Faisal added.
Economist Pande Radja Silalahi also stressed the need for the
audit agency to launch an investigation into the matter.
"It all comes down to the BPK now. They should investigate
this," Pande told the Post.
According to Pande, the current controversy surrounding IBRA
was the product of the agency's lack of transparency and weak
control mechanisms.