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)