IBRA threatens to take legal action against Hashim

JAKARTA (JP): The Indonesian Bank Restructuring Agency (IBRA) said on Tuesday it would take legal action against businessman Hashim S. Djojohadikusumo if he failed to settle his obligations with the government.

The head of asset management in the agency's investment division, Dasa Sutantio, said the now defunct Bank Pelita and Bank Istismarat, which were owned by Hashim, received some Rp 3.2 trillion in government liquidity support last year as the economic crisis deepened.

Speaking at a media conference, Dasa said the agency would take legal action in January if Hashim had not settled his banks' debts.

Bank Pelita and Bank Istismarat are among the 10 banks shut down by the government last year in its attempt to restructure the country's ailing banking sector.

The government has closed 66 banks, nationalized 11 banks and recapitalized eight banks since the end of 1997.

Some Rp 140 trillion in liquidity support was extended by the government to banks last year in a bid to prevent the complete collapse of the banking system amid plunging confidence in the industry and runs on banks.

Many of the banks' owners breached lending provisions by channeling most of their money to their other businesses. The bank owners are obliged to return the affiliated loans.

Some former bank owners have surrendered a combination of cash and fixed assets to repay some Rp 96 trillion in debts. These owners include Sudono Salim, the former owner of nationalized Bank Central Asia (BCA); the former owner of nationalized Bank Danamon, Usman Admadjaja; Mohamad "Bob" Hasan, the former owner of closed Bank Umum Nasional; Sjamsul Nursalim of the now defunct Bank Dagang Negara Indonesia; and Samadikun Hartono, the former owner of closed Bank Modern.

The surrendered fixed assets include shares in various domestic and overseas companies.

IBRA plans to dispose of the assets over the next four years. Immediate plans include floating some 30 percent of the shares in BCA through an initial public offering in a bid to raise some Rp 3 trillion, and divesting a 30 percent stake in publicly listed auto company PT Astra International to raise between Rp 2 trillion and Rp 3 trillion.

Hashim, whose brother Prabowo Subianto is married to one of former president Soeharto's daughters, controls the Tirtamas Group.

In addition to his banks' debts, the Tirtamas Group owes trillions of rupiah in nonperforming bank loans to IBRA.

IBRA currently controls more than Rp 230 trillion in bad loans transferred by closed down and recapitalized banks. The agency, however, is finding it difficult to sway the debtors, mostly influential businessmen, to restructure the loans.

IBRA has threatened litigation against recalcitrant debtors, however, despite these threats and other measures taken by the agency, IBRA has been criticized for moving too slowly to restructure the bad loans.

Agency chairman Glenn S. Yusuf met with President Abdurrahman Wahid on Tuesday. (rei)