IBRA grants debt-free status for Hendra, Ibrahim

The Jakarta Post, Jakarta

The Indonesian Bank Restructuring Agency (IBRA) has issued former bank owners Hendra Liem and Ibrahim Risjad official debt-free status, which could protect them against future charges for past banking crimes.

IBRA spokesman Rohan Hafas said on Monday that the letters attesting to their debt-free status were issued on Friday.

Hendra, former owner of Bank Budi Internasional, and Ibrahim, former owner of Bank Risjad Salim Internasional, respectively owed Rp 17.3 billion and Rp 332 billion in debt to the government.

The two businessmen are among 13 ex-bankers approved by the powerful Financial Sector Policy Committee (FSPC) to be given debt-free status, after they were deemed cooperative by IBRA in settling their debts through a combination of cash (30 percent) and assets (70 percent).

The FSPC groups together senior economics ministers.

IBRA has also granted debt-free status to businessmen Sudwikatmono, former owner of Bank Surya with a debt of Rp 1.88 trillion, and The Nin King, former owner of Bank Dana Hutama with a debt of Rp 23 billion.

In the wake of the 1997-1998 financial crisis, the government provided around Rp 144.5 trillion in liquidity support facility to bail out troubled banks. However, many of the now former bank owners have been accused of misusing the funds -- by channeling them to affiliated businesses and other banking crimes.

After years of unfruitful attempts to force 39 former bank owners to fully repay their debts, IBRA proposed an incentive scheme under which indebted businessmen would not be tried for past banking crimes if they are cooperative in repaying their debts.

The incentive scheme raised strong public criticism that such white-collar crimes would go unpunished.

Other indebted businessmen approved for debt-free status include: Hashim S. Djojohadikusumo, Njoo Kok Kiong, Honggo Wendratmo, Suparno Adijanto, Andy Hartawan, Ganda Eka Handria, Philip S. Widjaja, Mulyanto Tanaga and Anthony Salim.

Salim is the former controlling owner of Bank Central Asia.

It is not clear when IBRA will officially grant the debt-free status to these ex-bankers.

The FSPC is currently considering approving Siti Hardijanti Rukmana, the eldest daughter of former president Soeharto and former owner of Bank Yama, for the same status.