Legislators urge govt probe of bad debtors

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)