Wed, 23 Feb 2000

IBRA approves interbank claims on closed banks

JAKARTA (JP): The Indonesian Bank Restructuring Agency (IBRA) has decided that 34 interbank claims on banks closed by the government last year totaling Rp 1 trillion and US$32.8 million are eligible for the government guarantee program.

The agency's deputy chairman, Jerry Ng, said on Tuesday another 25 claims worth Rp 126 billion and $39 million were still in a process of verification by international auditor Ernst & Young.

Speaking at a media briefing, he said the payment of eligible claims would be made later this month after completing the verification of remaining claims.

The government closed 38 banks in March 1999 as part of efforts to restructure and clean up the country's banking industry.

The government covers all the obligations of the closed banks, including interbank claims, in a bid to prevent a widespread collapse of the banking system amid low confidence in the industry.

But IBRA decided to halt the payment of interbank claims following the outbreak of the high-profile Bank Bali scandal in the middle of last year.

The scandal revolved around the transfer of a commission fee from the bank to a private firm linked to the Golkar Party for its service in helping Bank Bali recover its interbank claims from IBRA.

IBRA then decided to verify interbank claims to make sure they were eligible to be covered by the blanket guarantee program.

But many bankers criticize IBRA for being too slow with the verification process. The banks need the cash to improve their liquidity and capital condition.

Jerry said there were a total of 216 interbank claims worth Rp 6.3 trillion and $466 million handled by IBRA, a unit of the finance ministry.

He said the agency had so far paid 11 claims totaling Rp 1 trillion and $20 million.

He said 63 claims worth Rp 2.62 trillion and $72.7 million were not eligible to be covered by the program.

He added that some 83 claims were taken out of the 216 claims because they were settled "bilaterally".


Separately, IBRA deputy chairman Mahmuddin Yassin said the agency would announce on Wednesday three consortium which would compete for its 45 percent stake in publicly listed automotive giant PT Astra International.

"They will submit their final bids on March 23, and we'll choose the winner on March 25," he told reporters on the sidelines of a hearing between the finance minister and House of Representatives Commission IX for financial and development planning affairs.

Mahmuddin declined to name the three consortium.

A U.S. consortium led by Newbridge Capital and Gilbert Global Equity had attempted to buy IBRA's stake in Astra. But the preferred bidder failed to pay a necessary up-front fee by the set deadline.

Several high-profile investors, including George Soros, Singapore's Cycle & Carriege Ltd. and Lazard Freres & Co., were said to be interested in buying the Astra stake.

IBRA plans to raise about Rp 3 trillion in cash from the Astra sale. The agency has targeted to raise a total of Rp 17 trillion in the current fiscal year ending March 31 to help finance the government bank restructuring and recapitalization program.

The agency has so far raised about Rp 12 trillion. IBRA is also planning to launch an initial public offering of Bank Central Asia (BCA) in a bid to raise another Rp 3 trillion next month. (rei)