IBRA told to publish audit result

IBRA told to publish audit result

JAKARTA (JP): President Abdurrahman Wahid ordered chairman of
the Indonesian Bank Restructuring Agency (IBRA) Cacuk Sudarijanto
on Tuesday to immediately publish and verify the agency's
financial audit result.

"The President orders the chairman of IBRA to immediately
announce the audit result," said a statement issued by the
Presidential office following a cabinet meeting late Monday.

In a May letter of intent to the International Monetary Fund
(IMF), the government said that IBRA would publish the audit
reports of its year-end 1999 accounts, with the assistance of an
international accountancy firm.

The move is part of efforts to boost transparency at the
agency which controls assets worth around Rp 600 trillion.

There have been rumors that the accounting firm may give a
disclaimer opinion on the audit report.

Finance Minister Bambang Sudibyo declined to comment on the
rumors, pointing out that the auditor had yet to complete an
important "standard procedure".

Coordinating Minister for Economy, Finance and Industry Kwik
Kian Gie said that he "would not be surprised" if it turned out
that the auditor gave a disclaimer opinion because much data
related to the assets transferred by domestic banks to the agency
was destroyed by their former owners.

Gus Dur (Abdurrahman) also asked Cacuk to immediately form an
oversight board for IBRA, and to select its members.

In the letter of intent, the government promised to form an
oversight board by the end of this month to improve governance at
the agency.

The President also repeated calls for IBRA to accelerate the
disposal of its assets.

IBRA has been criticized for the slow progress in selling the
assets.

Experts, including the IMF, have said that the disposal of
assets would help revive confidence in the economy.

IBRA is targeted to raise around Rp 18.9 trillion this year to
help finance the state budget.

The agency has so far raised only about Rp 2.8 trillion.

There's now increasing concern that IBRA might not be able to
reach the target, and that the agency might have to take a "fire
sale" approach to reach it.

"IBRA must sell the assets (quickly), even through a fire sale
or the target won't be achieved," he said.

Economist Sri Mulyani said that a disclaimer opinion on the
financial audit of IBRA would prove that the agency lacked the
capacity to manage the huge amount of assets, and that its
capability must be upgraded.

Debt restructuring

Meanwhile, secretary general of the financial sector policy
committee Syarifudin Tumenggung said at a press conference on
Tuesday that the committee (FSPC) had given a green light to IBRA
to go ahead with its plans to sign a restructuring agreement with
its six largest debtors owing around Rp 12 trillion.

He said that the debtors included Raja Garuda Mas Group,
Bakrie Group, Gunung Sewu Group, Agro Manunggal Group, PT
Polyprima Karyareksa, and PT Pacific Satelit Nusantara.

He said that the average recovery rate of the debts was 90
percent.

The FSPC comprises several senior economic ministers. IBRA has
to obtain the approval of the committee for the restructuring of
huge debts.

IBRA controls some Rp 220 trillion worth of non-performing
bank loans. The agency also has a mandate to restructure those
loans.

IBRA has said that it is concentrating on restructure the
debts owed by its 21 largest obligors. An obligor is a group of
indebted firms owned by one business group. (rei)