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)