IBRA repeats warning to closed bank owners to repay debts

IBRA repeats warning to closed bank owners to repay debts

JAKARTA (JP): The Indonesian Bank Restructuring Agency (IBRA)
warned on Saturday the owners of closed down Bank Centris, Bank
Pelita and Bank Istismarat to immediately repay their debts to
the government or risk legal action.

The agency said in a media statement that it was continuing
efforts to get firm commitments from the owners of the three
banks to repay their debts.

IBRA said it had set a deadline for the ex-bank owners before
the agency would resort to legal measures.

In a new Memorandum of Economic and Financial Policies (MEFP)
with the International Monetary Fund, the government said it
would recommend by Aug. 31 that the Attorney General's Office
prosecute the uncooperative former bank owners.

The government closed down 10 banks last year as part of
restructuring the country's ailing banking sector.

The former bank owners had to repay the money lent by their
banks to finance the operation of their other businesses. Most
of the closed down banks had breached the legal lending limit by
channeling most of their money to related business groups.

The former bank owners must also repay the government
liquidity support injected into their banks last year.

IBRA did not say how much the former owners of the above three
banks owed.

The agency, however, said the former owner of closed Bank
Subentra had no obligation to the government because the bank had
not breached the legal lending limit.

IBRA added that the former owners of nationalized Bank Tiara
Asia and Bank PDFCI had no debts with the government.

IBRA also said it had received assets from the former owner of
closed Bank Deka to repay its debt.

The agency did not provide details.

IBRA also said it was finalizing talks with former owners of
38 banks closed down in March to repay their obligations to the
government -- which some put at Rp 30 trillion.

The agency expects that by September the former owners of the
38 closed banks would have signed commitment letters concerning
repayment.

IBRA also said it was finalizing talks with the former owner
of nationalized Bank Risjad Salim Internasional (RSI).

RSI was one seven private banks taken over by the government
in March.

IBRA expects the former owners of the remaining six to follow
suit.

The former owners of the seven nationalized banks have Rp 9.4
trillion in combined debt to the government.

IBRA recently formed five holding companies to transfer the
various assets pledged by the country's business tycoons
including Liem Sioe Liong, Usman Admadjaja, Mohamad "Bob" Hasan,
Samadikun Hartono and Sjamsul Nursalim repay some Rp 96 trillion
in debts to the government.

Liem Sio Liong, also known as Sudono Salim, and Usman
Admadjaja respectively were founders of the country's two largest
private banks Bank Central Asia (BCA) and Bank Danamon which were
nationalized last August.

The banks of the three other tycoons were closed down.

IBRA is expected to sell the various assets in a bid to raise
proceeds to help finance the government's bank restructuring and
recapitalization program which is estimated to cost Rp 550
trillion, or half of the country's gross domestic product. (rei)