IBRA completes sale amid alleged graft
Dadan Wijaksana, The Jakarta Post, Jakarta
The Indonesian Bank Restructuring Agency (IBRA) said it had completed its massive loan asset sale program amid mounting allegations of irregularities.
IBRA Chairman Syafruddin Temenggung said late on Thursday that the agency collected Rp 5.7 trillion (about US$640 million) from the second round of sales, bringing the total proceeds to Rp 23.1 trillion from the sale of some Rp 135 trillion worth of non- performing loans.
"It is expected that all the payment processes will be completed by the end of September," Syafruddin said, adding that the lion's share of the earnings came in the form of cash, which stood at Rp 18.6 trillion, while the remaining was in the form of bank recapitalization bonds.
IBRA took over the loans from ailing banks in the wake of the late 1990s financial crisis.
The completion of the loan sale takes IBRA one step closer to meeting its target this year of raising Rp 42 trillion from asset and loan sales, the proceeds of which are to be used partly to help plug the 2002 budget deficit, projected at Rp 42 trillion.
However, there have been growing allegations of irregularities in the sale process.
A member of one of the consortium that bought the loan assets, for instance, turned out to be managed by a former president of a consulting firm which had been advising IBRA in the restructuring of the loans. This is seen as a competitive advantage to the particular bidder, which is unfair to other bidders because the former had obtained "inside information" about the assets. Analysts said IBRA should have disqualified the particular bidder, whose president also turns out to be a relative of IBRA deputy chairman Mohammad Syahrial.
There have also been accusations that some of the winning bidders were merely acting as vehicles for the debtors to repurchase the loans at a huge discount.
IBRA said that the transaction could be canceled if the bidders turned out to be linked to the debtors of the loans.
The House of Representatives has said that it would summon the agency next month, with a possibility that legislators would ask the Supreme Audit Agency (BPK) to launch an investigation into the case.
State Minister of National Development Planning/Bappenas chairman Kwik Gian Gie has repeatedly called on the government to review the program by launching an investigation to avoid more losses.
Some have even suggested the sales to be annulled.
Syahrial addressed the mounting calls by challenging anyone to prove the allegations, saying that he had made every effort to keep the process of the programs in line with the required regulations and procedures.
"For those of you who can prove that corruptive practices have taken place, you can file a lawsuit," he was quoted by Antara as saying.
Elsewhere, Syafruddin said that 70 percent of the buyers were local banks, asset management firms and securities companies. The remaining investors were foreign, although none are from internationally known investment firms or banks.
Established in 1998, IBRA controls over Rp 600 trillion worth of assets transferred by indebted bank owners, closed banks and recapitalized banks, and is mandated to restructure and sell the assets to raise cash.