Legislators urge govt probe of bad debtors

JAKARTA (JP): Legislators of the ruling Golkar Party are urging the government to extend its inquiry into debtors responsible for Rp 100 trillion (about US$11.7 billion) in bad loans at the country's state banks.

Thomas Suyatno said on Tuesday the government should investigate the causes of the bad loans and take legal action against those who committed crimes.

"Writing off the bad loans is not enough. The government has to make a further inquiry," he told The Jakarta Post.

He earlier claimed that he possessed a list of the country's 50 largest bad debtors at the state banks, with the largest single debtor owing Rp 8.7 trillion and the lowest on the list responsible for Rp 1.4 trillion.

The Indonesian Bank Restructuring Agency announced last week that it had taken over Rp 100 trillion in nonperforming loans at the seven state banks -- Bank Bumi Daya, Bank Dagang Negara, Bank Pembangunan Indonesia, Bank Ekspor Impor Indonesia, Bank Tabungan Negara, Bank Rakyat Indonesia and Bank Negara Indonesia. The bad loans involved at least 1,200 debtors.

IBRA deputy chairman Eko S. Budianto said the financial restructuring would remove bad assets from their loan portfolios to allow them to concentrate their resources on managing productive assets.

Legislator John Manafe, also from Golkar, concurred with Thomas that bad debtors should be tried because their debts were a burden to the public.

"The House will summon the minister of finance for an explanation," he said.

Media reports state that many of the bad debtors are politically well-connected businesspeople, with many linked to former president Soeharto.

The government has been under pressure to disclose the list of errant bankers whose violations of banking regulations partly contributed to the glut of nonperforming loans which hobbled state and private banks.

Despite increasing pressure, the country's financial authority said the list was for "internal purposes" only.

Bank Indonesia director Subarjo Joyosumarto said on Monday that revealing the list would violate a 1968 banking ruling.

"We will not disclose publicly the list of errant bankers. We'll stick with the 1968 bank ruling no. 13. If we violate the ruling, we could get a one-year jail penalty and a Rp 1 billion fine," he told reporters on the sidelines of a hearing with the House of Representatives.

In a recent letter of intent to the International Monetary Fund, the government said it would encourage 20 of the largest debtors to agree to restructuring before resorting to liquidation.

The government announced last week that 172 bankers were barred from overseas travel to ensure their presence for data verification and questioning regarding 38 banks closed down by the government on March 13.

Subarjo said the management and owners of the banks would be included in the list of errant bankers if they were proven to have committed banking crimes which led to the collapse of their institutions. (rei)