IBRA vows to regain Bank Bali's Rp 546b

JAKARTA (JP): Chairman of the Indonesian Bank Restructuring Agency (IBRA) Glenn S. Yusuf said on Monday that his organization would do its utmost to recover the Rp 546 billion (US$80 million) payment from Bank Bali to an investment firm.

He said that IBRA could use government regulation No. 17/1999, which empowered the agency to unilaterally annul earlier contracts made by banks under its control which were loss-causing ventures for the government.

"IBRA can annul the contract if it wants to. But we're still waiting for the completion of the investigation (of the Bank Bali scandal)," he said on the sidelines of a meeting with top officials of the House of Representatives.

IBRA is an agency under the Ministry of Finance set up last year to help restructure and recapitalize the country's ailing banking sector. It has so far taken over 13 private banks and recapitalized seven private banks.

The use of the regulation would be a test case of IBRA's power.

He said that the Ramli family, the former majority shareholder in Bank Bali, must repay the loss because the government would not contribute a single cent toward the payment.

IBRA has to recover the loss to prevent the recapitalization cost of Bank Bali, currently estimated at Rp 4.3 trillion, from soaring.

Separately, Bank Indonesia Governor Sjahril Sabirin said that the funds would have to be returned if their transfer was proven illegal.

Shake-up

Calls are growing for a massive shake-up of IBRA's management and the prosecution of Bank Bali's former directors on charges of corruption.

Ichsanuddin Noorsy and Thomas Suyatno, members of the House of Representatives budget and financial commission, were skeptical that IBRA remained unaware of the questionable deal between Bank Bali and investment firm, PT Era Giat Prima (EGP), in which the bank paid Rp 546 billion for assistance in recouping the bank's interbank claims on closed-down banks from IBRA.

"After all, Bank BDNI and other closed and taken-over banks which owed interbank debts to Bank Bali are all under the control of IBRA," Noorsy added.

Expressing shock over the scandal, Suyatno said he had never known of blatant fraud involving such a huge sum during his 30- year career in the banking industry.

The scandal has damaged the reputation of IBRA, which now controls about Rp 600 trillion in state assets. Banking legal expert Pradjoto disclosed late last month the scandal and implicated IBRA's deputy chairman Pande Lubis.

Glenn declined to confirm reports that Pande Lubis had been suspended, but said that all officials, including himself, should be suspended if they were implicated in the scandal to allow for the investigation to proceed.

Bank Bali is one of the country's private banks selected to join the government-sponsored recapitalization program.

Glenn said that the government was still committed to recapitalizing Bank Bali although the scandal could slow down the recapitalization process.

"This (the case) is just an anomaly ... Bank Bali is still a good bank," Glenn said.

IBRA confirmed last week Pradjoto's claim that Rp 546 billion was transferred from Bank Bali in early June to EGP, which is owned by businessman Setya Novanto, as a commission for the firm's services in helping the bank recoup some Rp 904 billion in interbank claims on closed banks.

The then owner and president of Bank Bali, Rudy Ramli, signed the contract with EGP in January.

IBRA said that Bank Bali did not need to use a third party to recoup its interbank claims because it was guaranteed by the agency through the government blanket guarantee program.

Standard Chartered Bank of the UK found out about the transfer of the Rp 546 billion from Bank Bali on July 20 after the former completed its due diligence audit on the latter, IBRA said.

Standard Chartered planned to buy a 20 percent stake in the bank.

Bank Bali was put under IBRA control after the Ramli family failed to put up its share of the recapitalization funding by the July 23 deadline.

Publicly listed Bank Bali will offer a rights issue in September to raise proceeds for its recapitalization program. Standard Chartered plans to buy 20 percent, with the government to purchase up to 80 percent of the remaining new shares.

Separately, National Police spokesman Brig. Gen. Togar Sianipar said the police had identified potential suspects in the scandal, including former Bank Bali administrators Rudy Ramli, Rusli Surjadi, Firman Sucahyo and Henri Kurniawan, EGP executives Setya Novanto and Joko S. Chandra and IBRA deputy chairman Pande Lubis.

"We have asked the immigration office to impose travel bans on these executives, except Lubis," Togar added. (rei/ylt/jsk)