IBRA won't investigate buyers of former Salim assets

IBRA won't investigate buyers of former Salim assets

Tantri Yuliandini, The Jakarta Post, Jakarta

The Indonesian Bank Restructuring Agency (IBRA) will not
actively conduct an investigation into the buyers of former Salim
Group assets, despite concern that they may be repurchased by the
former owner, according to a senior executive at the agency.

Director of IBRA's Asset Management Investment (AMI) unit Dasa
Sutantio said on Wednesday that the agency had no way of tracking
where the sold assets really went.

"Our investigation is solely based on the documents the buyers
give us; that way we research their backgrounds and whether or
not they are connected to the previous owners (of the sold
assets)," he told The Jakarta Post.

Dasa was responding to growing concern that the assets might
be sold off to their previous owner, the Salim family, by various
means.

The Salim Group, once the country's largest business
conglomerate, transferred shares in some 100 companies to IBRA in
a bid to repay its debt to the government. Salim incurred the
debt as a result of the government's massive bailout of the
group's former financial arm Bank Central Asia (BCA), which has
now been nationalized.

Under the existing rules, Salim is not allowed to repurchase
the assets. The rule also applies to other indebted former bank
owners.

The Financial Sector Policy Committee (FSPC), which groups
several senior economic ministers and has the last say on IBRA's
major assets sale program, has been very clear that the assets
should not be sold to parties directly or indirectly affiliated
to Salim.

The FSPC has also stipulated that buyers of the assets are not
allowed to resell them to Salim for two years.

"So, if later on it is proven that the assets were actually
sold back to Salim then IBRA would have the right to demand the
assets be returned," Dasa said.

Concern over the possibility that Salim had repurchased the
assets arose after PT Holdiko managed to sell so many within a
very short period.

Holdiko was established in 1998 to oversee and facilitate the
sale of the former Salim assets.

Holdiko said earlier that this year it had finalized 19
transactions raising total gross proceeds of Rp 11.67 trillion
(about US$1.1 billion), compared with IBRA's cash target of Rp 27
trillion this year.

There has also been concern that IBRA would end up selling BCA
shares to a Salim affiliate because the agency was under pressure
to complete, as targeted, the key program before the end of this
year.

Analysts said that no prospective investors, except Salim,
could complete the necessary due diligence process within the
very short time available.

Elsewhere, Dasa said that the agency itself could not monitor
the movement of the assets after they had been sold but would
have to rely on the public to report any misdeeds, adding that
strong proof would be needed for the agency to launch a formal
forensic investigation.

"We are not limiting the sale of the assets simply because
they are the former owners, but because they have not yet
finished repaying their dues to the government," Dasa asserted.