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)