IBRA replaces deputy chairman Eko Budianto

JAKARTA (JP): Minister of Finance Bambang Sudibyo installed Irwan Siregar as the new deputy chairman of the Indonesian Bank Restructuring Agency (IBRA) in charge of loan recovery, replacing Eko S. Budianto, at a closed-door ceremony on Tuesday.

Bambang later told a news conference that the replacement that analysts saw as unusually abrupt was an internal affair and a decision within the jurisdiction of IBRA chairman Cacuk Sudarijanto.

Cacuk, who fired Eko on Monday, did not attend the ceremony as he was in Singapore attending a conference.

"I am simply fulfilling the request from Cacuk to replace Eko," he told reporters.

Speaking at a forum of the Singapore Chinese Chamber of Commerce and Industry, Cacuk said the move was aimed at speeding up IBRA's asset disposal program.

"I know my staff. I am not saying he was slow but I know him and my reason (for asking him to leave IBRA) is only for the acceleration of sales," he was quoted by AFP as saying.

Irwan was formerly Eko's deputy in the division which is in charge of restructuring more than Rp 220 trillion (US$29.7 billion) worth of bad loans taken over from closed down, nationalized and restructured banks.

Bambang said he agreed with Cacuk that the replacement was aimed at improving the dynamics of the agency which managed about Rp 600 trillion worth of assets and bad loans.

IBRA, according to Bambang, is an independent institution and any recommendation made by the agency's chairman should be met as long as it is for the sake of the agency's betterment.

Bambang hoped Irwan would accelerate the restructuring process of the nonperforming loans under IBRA.

"The nonperforming loans are the cause of the economic stagnation in Indonesia, where 40 percent of production capacity is not being utilized," Bambang added.

Eko told reporters after the installation ceremony that he was only notified of his dismissal on Monday evening.

Eko, who was brought to IBRA by former chairman Glenn Yusuf, said he had worked for IBRA for almost two years.

He claimed that he and his team had successfully built a working system for IBRA so the agency could run like it was now doing.

"My replacement will make bad debtors happy but will be detrimental to IBRA's mission," Eko said.

He said he was replaced for what Cacuk called a "better, dynamic organization".

"But the real reason is that we have differences of opinion on the system of asset valuation," Eko added, recalling his spat with Cacuk.

He added that for three months he and Cacuk had principal differences of opinion regarding the system of valuing assets.

Cacuk took over the helm of the powerful agency from Glenn Yusuf in December.

Eko recalled an incident a few weeks ago where one of his assistants was accused of accepting bribes but subsequent investigations proved his assistant was clean.

"This was only a conspiracy to discredit me," he added.

IBRA senior deputy chairman Arwin Rasyid acknowledged that Cacuk did not like Eko's style.

"But Cacuk has the right to set up a team he fully trusts," Arwin added.

Adler Manurung, a senior analyst at Nikko Securities Indonesia discounted any negative rumors surrounding the replacement of Eko.

He said he could see nothing negative about such a replacement as the new person taking over Eko's position came from within IBRA.

"Nothing looks negative and suspicious, it is all positive. The new official is from within IBRA, so it is normal," he said.

Whoever replacing Eko, he hoped the new person could make some work improvements, according to Adler.

"And it is good that the new person is one who knows how the system at IBRA works," he added. (udi)