IBRA threatens to take legal action against Hashim

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)