Legal counsel team needs extra time to identify errant debtors
Legal counsel team needs extra time to identify errant debtors
Dadan Wijaksana, The Jakarta Post, Jakarta
The team of legal experts set up by the government to identify
which ex-bank owners have been uncooperative in settling around
US$10 billion of debts to the state, has asked for extra time, up
until May 30, to complete its task.
The team, which was originally given one month to do the job,
missed the Thursday deadline due to "technical problems."
It made the request for additional time at a meeting of the
Financial Sector Policy Committee (FSPC) late on Thursday.
The FSPC groups senior economic ministers overseeing major
bank and corporate debt restructuring programs.
Team member Todung Mulya Lubis said that the Cabinet would
decide whether to approve the request or not.
He declined to disclose the progress achieved in the team's
work, saying he had no right to leak any information when the
review was still underway.
Some 33 former bank owners owe huge debts to the state, mostly
resulting from the multibillion dollar emergency liquidity loans
injected by the government into their banks in the wake of the
1997 financial crisis.
Recovering these loans is crucial to helping reduce the
strains on the state budget.
International lenders like the International Monetary Fund are
also keen on see a credible plan being adopted to force the
errant debtors to repay what they owe.
The ex-bank owners agreed in 1998 to settle their debts via a
combination of asset transfers and cash payments. But with the
agreement expiring this year, progress as regards debt settlement
has been painfully slow.
The government initially planned to extend the repayment
period, but was widely criticized by the public and politicians
who demanded immediate legal action against the wayward debtors.
Last month, the government set up the legal counsel team as
part of a new mechanism for settling the obligations of the
former bank owners.
Under the plan, uncooperative debtors would be given a three-
month period to settle their debts or risk legal sanctions
ranging from travel bans to asset sequestration and jail terms.
There have been rumors that the legal counsel team was unable
to complete its task on time because the Indonesian Bank
Restructuring Agency (IBRA) had been uncooperative in furnishing
the necessary documents to the legal experts.
IBRA Chairman I Putu Gede Ary Suta was the one who first
proposed the extension of the repayment period.
But FSPC secretary Safruddin Temenggung said the rumors were
groundless, claiming that the delay in the team's work was
primarily due to the huge volume of paperwork involved.
He also said that there was no pressure being applied by the
ex-bank owners, who were once very rich and influential people in
this country.
"This (the delay) has nothing to do with the debtors. The team
hasn't even met them yet.
"It's simply because of technical matters ... because there is
such a volume of data on all 33 debtors. And I think the request
is reasonable," Safruddin told reporters on Thursday.
While data collection had almost been completed, Syafruddin
said the additional time would be needed for analysis and
decisionmaking.