IBRA's challenge after the panic over Astra

IBRA's challenge after the panic over Astra

After the Indonesian Bank Restructuring Agency (IBRA) took the
controversial steps on what is regarded as its best asset -- PT
Astra International -- The Jakarta Post interviewed Tony A.
Prasetyantono from Yogyakarta's Gadjah Mada University on what he
sees as IBRA's future performance. An excerpt of the interview
follows:

Question: How do you view the result of Astra's shareholders
meeting?

Answer: In management terms, there is no problem from the
shift of (chief executive officer) Rini Soewandi to (Theodore)
"Teddy" P. Rahmat because they both have a good reputation. Teddy
is the one who helped raise Astra. Rini also revived Astra and
restructurized its debts, leading the company to a better
performance.

The problem was when IBRA requested that Rini be replaced; at
that time, wasn't there a better option? IBRA could have still
sold Astra shares with a good price without changing the
management.

Q: The interests of minority shares seemed to get scant attention
from IBRA at the shareholders meeting. Do you agree?

A: Yes. The reason was that IBRA was being pressed to gain Rp 3
trillion from selling Astra for the state budget. So when Rini
did not immediately give her approval to the sale scenario, IBRA
instantly replaced her.

I think there were more persuasive ways which could have been
done, which I have also told pak Cacuk (Sudarijanto, IBRA
chairman) ... If IBRA had more patience I think they could have
won over Rini's heart. And I think Rini also had displayed good
intentions by going to IBRA.

But all that has past. What's important is that the new
management must convince the public (of its performance); this
will affect market sentiment toward the price (of Astra shares).
The other day shares changed by 125 points.

The new management, with the support of IBRA, must convince
the public that they are concerned with professionalism and that
they are struggling to sell Astra shares.

In this case Teddy Rahmat's task will be to act as a bridge to
ease the process of share sales of Rp 3 trillion. There's a
possibility that Teddy will not stay long (in Astra) because the
new investors might not prefer him.

Teddy did not seem really ambitious in getting the position.
Actually he didn't want it. Cacuk had to talk him into it for
four hours and convince him to help. Nevertheless on Rini's side
there was a feeling of a coup. So personally that would not be
good for Teddy.

Q: How do you see the prospect of IBRA being able to sell shares
by its deadline of March 25?

A: Judging from the past performance in reviving Astra, the
chance is quite good. We hope the price can get better; it once
reached Rp 3,400 to Rp 3,900 (per share). Hopefully it can return
shortly again to that level.

Q: Do you see political interests in the change of management
apart from IBRA's apparent impatience?

A: I don't know whether it's political or personal. The
Soeryadjaya family appears to be trying to return ...
historically this family brought up Astra. But I cannot see
larger political interests implicating, for instance,
nationalists and Muslim politicians ...

Q: But do you think IBRA can overcome various political
interests?

A: That is what I have repeatedly told pak Cacuk, that what is
important now is to cleanse IBRA from such interests. IBRA must
replace nonprofessional factors ... It would be too risky to let
nonprofessional factors enter IBRA. And I see that IBRA is
beginning to recruit professionals who hopefully will not be
tempted to play politics.

Q: How do you think the Astra case will influence IBRA's handling
of other publicly listed companies under the agency's management?

A: IBRA should position itself as a facilitator, so that if
Astra, for instance, is solid and can sell itself, IBRA need not
be involved too much. IBRA must know when it should be or should
not be involved. With a good management under (Rini Soewandi) I
had hoped that IBRA would not panic. And the state budget, as
(economist) Pande Radja Silalahi said, is safe with a windfall
profit from rising oil prices, together with the grant of US$500
million.

However, because IBRA's performance was judged from the speed
in its sale of assets, it panicked. But with its current
performance, I'm sure Astra can be sold for a good price. (Sri
Wahyuni)