IMF questions delay of legal action

IMF questions delay of legal action

JAKARTA (JP): President Abdurrahman Wahid, also known as Gus
Dur, said that the International Monetary Fund had questioned the
government's decision to delay legal proceedings against three
business tycoons, Sjamsul Nursalim, Marimutu Sinivasan, and
Prajogo Pangestu.

"Anoop Singh inquired about the differences in treatment, why
some (legal proceedings) were delayed," he was quoted by Antara
as saying.

IMF visiting deputy director for Asia Pacific Anoop Singh met
with the President at the weekend.

Gus Dur said that there was nothing else that could be done as
they were major exporters, saying "we have to make sacrifices for
the common good."

Syamsul Nursalim is the owner and founder of the Gadjah
Tunggal group, Prajogo Pangestu controls the giant timber company
PT Barito Pacific Timber, and Marimutu Sinivasan is the owner of
the giant textile firm Texmaco Group.

The three businessmen had been accused of financial
wrongdoings and owe massive debts to the government.

Gus Dur announced a controversial plan to delay the legal
proceedings against the three tycoons last year, which aroused
strong criticism because the businessmen had thrived during the
reign of former authoritarian president Soeharto, including
through bad business practices.

The IMF promised the Abdurrahman administration early last
year some US$5 billion in bailout funds to help finance the
country's three-year economic reform program, which included
boosting good governance in the country's economic and business
affairs.

Separately, Coordinating Minister for the Economy Rizal Ramli
told the press following the weekend meeting that the IMF
insisted on the importance of maintaining the independence of
Bank Indonesia to help revive investor confidence in the ailing
economy, according to Satunet.Com.

Rizal said that the government also shared the view of the
IMF.

Singh made the remarks following the recent moving of a bill
by the government in the House of Representatives to amend the
central bank law, which critics say is merely designed to oust
Bank Indonesia Governor Sjahril Sabirin from his post before his
term ends, thus raising questions about the independence of the
central bank.

A special House team is scheduled to continue debating the
government bill on the amendment of the central bank law sometime
in the middle of this month. The team is expected to complete its
deliberations later this month.

The IMF delayed in December its next $400 million loan
disbursement to the country until February or March. The Fund did
not give any reason for the delay, but finance minister Prijadi
Praptosuhardjo admitted that the IMF wanted the House to first
complete the amendment of the central bank law before it
disbursed the loan.

The Fund has so far disbursed around $1 billion out of the $5
billion budget.

The current central bank law was approved by the House last
year. Under the law, the Bank Indonesia governor and deputy
governors cannot be dismissed before their terms end unless they
have been proven to have committed a crime, become incapacitated
or voluntarily resign.

Under the proposed new law, the House can dismiss the members
of Bank Indonesia's board of governors if they fail to meet
monetary targets or if they fail to be active in office for three
consecutive months.

Sjahril has been accused of being involved in the high profile
Bank Bali scandal. He was released late last year after five
months of detention by the Attorney General's Office, and his
trial is expected to start soon.

Abdurrahman has long insisted on the dismissal of Sjahril as
part of effort to shake up the troubled Bank Indonesia. (tnt)