'IBRA reshuffle expected this week'

Dadan Wijaksana, The Jakarta Post, Jakarta

The government is expected to announce a reshuffle of the Indonesian Bank Restructuring Agency's (IBRA's) deputies this week, with Soebowo Musa and I Nyoman Sender likely to be victims, sources said.

Soebowo is the deputy chairman with responsibility for the Bank Restructuring Unit (BRU), while Sender controls Asset Management Credit (AMC).

"I think, it (the reshuffle) will take place sometime this week, because it has to be done quickly so as to create a workable and solid team as soon as possible," a government source told The Jakarta Post on Saturday.

Rumors of a major shakeup at the agency were rife right after the changing of IBRA's top postholder two weeks ago, which saw Syafruddin Temenggung appointed as the replacement for I Putu Gede Ary Suta.

State Minister of State Enterprises Laksamana Sukardi said earlier that one or two deputies of the total five might have to be replaced.

The source however, could not confirm which or how many deputies were to be replaced, saying, "That's still under discussion."

Syafruddin is the seventh IBRA's chairman in just over four years of its existence. Such a high turnover signals strong politicking inside the agency.

Since it was founded in 1998, IBRA has been the focus of political wrangling because it manages more than Rp 600 trillion (about US$65 billion) in assets, including loans pledged by debtors and owners of failed banks.

This eventually posed a serious threat to IBRA in carrying out its main duty: restructuring banks, loans and assets and then selling them.

Despite the fact that IBRA's mandate will expire in less than two years' time, progress in the attempt to restructure the banking sector and sell assets has been slow, partly due to political interference.

Restructuring those banks is critical to accelerating the country's economic activities as a whole.

A healthy banking sector improves its intermediary function to the industrial sector, thereby keeping the economic's wheels rolling again.

IBRA has, so far, managed to sell off only one-third of the total assets.

This means it has to sell off the remaining two-thirds of the assets in a much shorter time.

When Ary Suta assumed the top IBRA post in June last year, he made an immediate impact on the agency by adopting a centralistic approach, cutting short the decision-making chain.

Ary Suta soon wielded greater power within the agency, as evidenced by his move to replace his four deputies with men of his own choice.

Now that he has gone, speculation surfaced that a reshuffle was needed to clear out Ary Suta's men, thus getting Syafruddin off to a smooth start in carrying out his duties, as retaining all of the existing deputies would have created too many opportunities for conflicts of interest.

Meanwhile, another source close to the agency told the Post there had been plenty of discussion about the reshuffle, with Soebowo and Sender becoming the most likely victims.

The two are known to be close colleagues of Ary Suta.