IBRA needs more powerful regulation to punish debtors
A'an Suryana, The Jakarta Post, Jakarta
The Indonesian Bank Restructuring Agency (IBRA) should seek support from other institutions in its efforts to make former bank owners responsible for their banking crimes in the past, experts said.
Legal expert Luhut Pangaribuan said that taking the bad ex- bankers to court would not ensure victory for the agency because of the corrupt court system here.
"The legal approach is not enough, as has been evident in the past, when IBRA was defeated several times in court.
"Therefore, the agency must seek support from other powerful institutions, such as the Supreme Court and the Ministry of Justice and Human Rights, to help monitor court proceedings," Luhut told The Jakarta Post on Wednesday.
He said that it was general knowledge that corruption permeated day-to-day operations of the court.
IBRA started another round of legal action against five former bank owners who have been considered uncooperative in settling their debts to the state.
On Tuesday, the agency gave the police the documents necessary to the case, including the files on 29 top executives of the banks.
The five former owners of the closed banks are: Fadel Muhammad, the former owner of Bank Intan, Trijono Gondokusumo of Bank Putera Surya Perkasa, Santosa Sumali, who owned both Bank Bahari and Bank Metropolitan, and Baringin Panggabean and Joseph Januardy, who owned Bank Namura Internusa Maduma.
Together, the debtors owe Rp 2.18 trillion (around US$240 million) to the state.
They are five of the 35 ex-bank owners whose banks received Rp 144.5 trillion in liquidity support funds from the government in the wake of the 1997-98 financial crisis. Most of the funds, however, had been misused, and the ex-bank owners have also been accused of violating the legal lending limit regulation.
IBRA has been unable to collect repayment from them for four years, and the government is now pushing ahead with legal action against the recalcitrant debtors.
But there has been concerns that the government or IBRA might lose its case again, similar to what happened with the past 10 cases on ex-bank owners that had been taken to court: Many of the 10 have been acquitted on all charges on the grounds that, according to the law on companies, the charges should be directed to the board of directors and not the shareholders or owners.
Legal expert Todung Mulya Lubis said that in addition to winning political support from other relevant institutions, IBRA must also be able to provide proof that the former bank owners had used their influence in ruining their banks.
He admitted that the bank owners, or the major shareholders in most cases, could not be held responsible for the bank's daily operations, as stipulated in the Law on Limited Liability Company.
"Although it is true, the clause has a limitation. If the bank owners can be proven to have misused their positions for their own interests, they could be thrown in jail," he told the Post.
He said that there were many cases in which the shareholders often forced their directors to lend the bank's money to their children or relatives.
"The question is whether the agency has a strong will to pursue it," Todung added.
Separately, the agency's spokesman Raymond van Beekum said the law on company was a stumbling block for the agency to pursue the bad bankers.
"We are pursuing a new strategy which will place the shareholders as the ultimate beneficiary of the criminal cases that their banks had done in the past," he told the Post.