IBRA chairman Ary Suta again in tight spot

Berni K. Moestafa, The Jakarta Post, Jakarta

Chairman of the Indonesian Bank Restructuring Agency (IBRA), I Putu Gede Ary Suta might find himself in a tight spot again, as a number of recent controversial decisions threaten to backfire on him.

Over the past few days, analysts have begun to question the credibility of one of the country's most powerful institutions.

Powerful in that IBRA controls some US$60 billion in private assets that it must quickly sell off to kickstart economic recovery.

"What we have here... is a question of governance hanging over IBRA," banking analyst Mirza Adityaswara of research firm Business Reform and Reconstruction Corp. (BRRC) said on Saturday.

Critics against IBRA have been extraordinarily vocal following a string of controversial decisions that began late last year.

Some believe IBRA reached its low-point last week.

That was when the government scrapped IBRA's proposal to extend the repayment period for former bankers who owe the state over US$10 billion in misused liquidity loans.

The plan was initially approved by a group of senior ministers under the Financial Policy Sector Committee (FSPC), yet it drew immediate fire from the public.

Lambasted as a product of business interests working in IBRA, critics charged the debt extension plan as unjust amid widespread economic hardship.

It took over two months, a joint team of three coordinating ministers, and strong words from the International Monetary Fund (IMF) for the government to drop the plan.

"IBRA has clearly put FSPC to shame," Mirza said.

He said that IBRA's ability to get the debt extension plan endorsed by the FSPC showed it lacked control over the agency it was suppose to supervise.

Control was also the reason why IBRA was denied the power to select the winner in the crucial sale of Bank Central Asia (BCA).

Amid public pressure to drop the debt extension plan, the government further moved to assume full control over BCA's sale process just as it was entering its final days.

State Minister of State Enterprises Laksamana Sukardi, who is in charge of IBRA, said the move would improve the credibility of BCA's sale. But Ary Suta argued it violated IBRA's right.

"It's a matter of not having coordination, and not wanting to be coordinated," Mirza said of the quarrel among the two.

This was not the first time analysts took note of possible tension between Laksamana and Ary Suta.

Ary Suta was appointed in the last days of former president Abdurrahman Wahid's power struggle against growing impeachment efforts.

After a new government took over, it made little sense politically to retain Ary Suta in his strategic post, analysts said.

When Laksamana seized IBRA from the Finance Minister's control, many believed Ary Suta's days were numbered.

But under Laksamana he has survived nonetheless, and along the way continued to pass on controversial decisions.

This, however, may have started to backfire.

Since the questionable sale of PT Indomobil Sukses International last December, pressure against IBRA has picked up.

Analysts suspected Indomobil's sale was tainted with fraud.

This prompted the Business Competition Supervisory Commission (KPPU) to launch an investigation, which again tarnished IBRA.

Early this year, BCA sales grabbed media headlines amid reports that IBRA was about to let the bank's former owner, the influential Salim Group, illegally regain control of BCA.

Later on, these reports gave way to charges of unfair practices discriminating against the foreign consortia bidding for BCA.

Laksamana finally said that it was he, and not IBRA, who had the final say on BCA, which merely served to amplify IBRA's fading credibility and with it that of Ary Suta.

Last week the daily Tempo quoted an unidentified source as saying that Ary Suta might soon be replaced.

KPPU member and economist Faisal Basri last week openly called for Ary Suta's resignation.

Inside IBRA, support behind Ary Suta is reportedly also thin.

"The situation here (at IBRA) is getting hot," said one IBRA official who spoke on condition of anonymity.

He said Ary Suta's reorganization program last year displaced employees across the agency, putting it firmly under his control.

"We had procedures that ensure accountability, but under the name of efficiency he turned them upside down, and basically redesigned them so that he can have his own way," the official said.

He pointed to last year's reshuffle at top management levels, which he alleged were now filled with Ary Suta's "people".

Ary Suta could not be reached for comment on Saturday, but IBRA spokesman Suryo Susilo dismissed the rumors as baseless.

"Look at our performance and at our transparency," he said referring to the agency's asset sales target which IBRA was able to meet despite internal conflicts hampering works last year.

According to him, talks of Ary Suta's imminent ouster have been recurring and so far always proven wrong.