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.