'IBRA can't get money back through corrupt courts'

'IBRA can't get money back through corrupt courts'

Dadan Wijaksana, The Jakarta Post, Jakarta

A special team of legal experts has recommended that the
Indonesian Bank Restructuring Agency (IBRA) take legal action
against former bank owners who have been uncooperative in
settling their debts with the government.

However, one huge question lingers on whether the agency could
actually win any legal battle against the wealthy ex-bankers
given the many losses suffered by IBRA in past court battles.

Noted legal expert Prajoto expressed on Wednesday his
pessimism over the prospect of the agency ending up on the
winning side, citing the country's corrupt justice system.

"From the judicial point of view, (there is) no doubt IBRA
should win. But practically speaking, due to the bribe mechanisms
that still flourish in the courts ... the government will
eventually have to face the bitter reality that there is almost
no chance to beat them," Prajoto told The Jakarta Post.

He said that going straight to trial would be a mistake, which
would cause more losses to the state.

He made the statement in response to a report in the Kompas
daily on Wednesday that the special legal team assigned by the
government to review the performance of some 33 ex-bank owners in
repaying debts to the government had finished reviewing nine of
the bankers, with a result suggesting that all of them were
considered uncooperative at best.

The 33 former bank owners have been charged with misusing most
of the Rp 144 trillion in state-funded liquidity loans during the
crisis in 1997-1998.

To avoid criminal charges, they agreed to sign an out-of-court
settlement agreement with the government in 1998. Most of the
agreements expire this year, and most of the debtors have not
even begun their debt repayments.

The government must seek ways to recover the loans.

An IBRA proposal to give the indebted bankers another 10 years
to repay the debts was scrapped following strong public criticism
and high demands to bring the bankers to court and seize their
assets.

Under pressure from the public and the International Monetary
Fund, the government then assigned a special legal team to filter
out the most uncooperative debtors and make recommendations on
what legal action should be taken.

The uncooperative debtors will be given three months to settle
their obligations before legal action is taken, which may include
jail time and asset seizures.

Meanwhile, lawyer Hotman Paris Hutapea, was also of the same
opinion as Prajoto, saying that if there was no revision on the
so-called shareholders' debt settlement agreements, going to
trial would be a waste of time because the agency would lose
anyway.

"Revising those agreements should be the government's
priority. It's better to take one step back first only to move
ahead later, rather than experiencing a total loss," Hotman said.

Meanwhile, Luhut Pangaribuan, a member of the special legal
team, said that the team had good reasons to say that IBRA could
win the court battle against the ex-bank owners.

"The fact that IBRA's litigation record has been poor so far
should not stand in the way of bringing those debtors to
justice," Luhut added optimistically.

The nine ex-bank owners are actually considered relatively
small debtors when compared to other indebted bank owners like
Anthony Salim (former owner of Bank Central Asia) and Syamsul
Nursalim (of the now defunct Bank Dagang Nasional Indonesia) who
owe the state billions of dollars.

The legal team has yet to complete its review on that group of
bank owners who owe total of Rp 88 trillion to the government.