IBRA pushes govt for release of bad debtors
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.