IBRA to file criminal charges against ex-bankers

IBRA to file criminal charges against ex-bankers

The Jakarta Post, Jakarta

Five former bankers will face criminal charges after failing
to repay debts they owe to the government, said the Indonesian
Bank Restructuring Agency (IBRA) as it brushed aside questions
about whether its largest debtors would receive the same
treatment.

IBRA chairman Syafruddin Temenggung said the plan to deal with
the five debtors through the courts had been approved by
President Megawati Soekarnoputri last week.

"The five whom we deem to be uncooperative are (the former
owners of) Bank PSP, Bank Intan, Bank Bahari, Bank Metropolitan
and Bank Namura," Syafruddin told reporters on the sidelines of a
hearing with the House of Representatives' Commission IX on
financial affairs.

In total, the five ex-bankers owe IBRA some Rp 2.18 trillion
(about US$238 million), he said, adding that the agency would
soon file criminal charges against them.

The plan follows months of indecisiveness over the taking of
action against various ex-bankers who have admitted to having
misused more than US$10 billion in state funds, and who have
largely neglected to repay their debts after having agreed to do
so four years ago.

Syafruddin said the five ex-bankers were among 28 debtors who
agreed to the Deed of Indebtedness (APU) debt settlement scheme.

The APU settlements cover debts worth Rp 18 trillion (about
$1.96 billion), which must be repaid through a mixture of assets
and cash settlements.

Other repayment schemes agreed upon in 1998 are the Master of
Acquisition and Settlement Agreements (MSAA), and the Master of
Refinancing and Notes Issuance Agreements (MRNIA).

The three schemes apply to a total of 35 ex-bank owners, who
opted for the settlements to avoid prosecution after they misused
Rp 138 trillion in state funds.

Bank Indonesia injected the money into the banks to bolster
their liquidity amid massive runs during the 1997 economic
crisis.

Syafruddin said IBRA decided to prosecute the five former
bankers because they were reluctant to settle their debts despite
having been offered incentives to pay up.

IBRA agreed to waive payments on interest and fines amounting
to Rp 1.43 trillion, which has slashed the ex-bankers' debts to
Rp 2.186 trillion compared to Rp 3.618 trillion originally.

As for the remaining 23 APU debtors, Syafruddin said their
debt settlements were nearing completion as most had been
relatively cooperative.

In a meeting last week with President Megawati, the government
also approved the settlement of MSAA debtor Ibrahim Risyad.

The former owner of Bank Risyad Salim International avoided
possible criminal charges by paying Rp 27 billion in cash last
month on top of the assets he had previously surrendered to IBRA.

MSAAs apply to the five largest debtors, Muhammad "Bob" Hassan
(Bank Umum Nasional), Sudwikatmono (Bank Subentra), Soedono Salim
(Bank Central Asia), Sjamsul Nursalim (BDNI) and Ibrahim (PT
Risyad Salim International).

Together they owe IBRA some $8 billion. However, when asked
whether a decision had been reached on them, Syafruddin said "not
yet".

Critics have labeled the lackluster level of repayments made
by some of the country's biggest conglomerates as being
illustrative of the government's inability to get tough with
politically well-connected businessmen.