IBRA pushes govt for release of bad debtors
The Jakarta Post, Jakarta
The Indonesian Bank Restructuring Agency (IBRA) increased the pressure on the government on Thursday to end the indecision over whether it will drop criminal charges against ex-bankers who abused trillions of rupiah in state loans.
IBRA chairman Syafruddin Temenggung said a decision must be made immediately because continued indecision would undermine the government's credibility.
"We need to make up our minds about this soon. Granting them (cooperative debtors) a release and giving them discharge status would create legal certainty. We can't afford further delays," Syafruddin said during a hearing with House of Representatives Commission II for legal affairs.
The cooperative debtors he was referring to are five former bankers who, according to IBRA, have settled their debts and are thus entitled to have all criminal charges against them dropped.
They are among the 35 ex-bankers who signed on for the shareholder settlement program. This allowed them to avoid prosecution after admitting to having abused some Rp 138 trillion (about US$15.33 billion) in Bank Indonesia liquidity loans and violating banking regulations.
In return, the former bankers must pay back to IBRA the amount of money they abused. The program calls for a mixed settlement of assets and cash, with IBRA in charge of selling the assets to recoup the lost funds.
But with the repayment deadline expiring for most of the debtors this year, only five are considered to have met their obligations.
IBRA has said the five should be released from the possibility of prosecution. The government, however, appears unsure.
During a Cabinet meeting last week the government failed to agree who should sign the release and discharge documents, and a final decision was postponed until early next month.
Government officials were seen by observers as avoiding the task for fear of angering the public, and officials might only be willing to sign the documents if ordered to do so by President Megawati Soekarnoputri.
Politicking has also set in, with some opposition politicians saying that Megawati must bear the responsibility for any move to drop criminal charges against the ex-bankers.
Analysts suspect the government indecision over the matter stems from a fear of a public backlash.
The former bankers are among the country's wealthiest businessmen and despite being heavily indebted continue to lead lavish lives.
In the meantime, debt repayment under the shareholder settlement program has been minimal. Critics also say some of the debtors cheated on their payments by surrendering stakes in properties and firms that they then stripped of their assets, resulting in a poor recovery rate.
IBRA's earlier attempt to extend the shareholder settlement program to 10 years was voted down by a wave of public criticism.
A team of legal experts suggested IBRA pursue legal action against recalcitrant debtors, but the agency dismissed the proposal as unworkable because of the country's corrupt judiciary.
But legislators on Commission II voiced concern about simply freeing the debtors off all criminal charges.
"If the question is one of providing legal certainty, a better question would be to ask to whom we shall provide legal certainty," said Dwi Ria Latifa of the Indonesian Democratic Party of Struggle (PDI Perjuangan).
"Shall we reserve legal certainty for those debtors who cost this country trillions of rupiah, or the public?" she asked.
She added that even if the ex-bankers complied with the shareholder program, the low recovery rate from the sale of their assets should also be taken into account.
Sales of assets belonging to the Salim Group, the largest of the 35 debtors, have yielded some Rp 17 trillion in proceeds, compared to the Rp 52.7 trillion the group owed. Still, IBRA said the Salim Group had been cooperative and was the latest among the five recommended for release from criminal charges.