March deadline set for IBRA debtors
Berni K. Moestafa, The Jakarta Post, Jakarta
Former bank owners have until March 31, to agree to pay off their debts to the Indonesian Bank Restructuring Agency (IBRA) under the revised shareholders settlement program, otherwise the government would take stern measures against them, a government official said.
Secretary to the Financial Sector Policy Committee (FSPC), Syafruddin Temengung said on Wednesday that debtors who missed the March deadline would be categorized as "noncooperative".
"After March 31, IBRA will report to the FSPC and sort out those who are cooperative and those who are not. Afterwards we will discuss the steps to be taken in consultation with institutions like the Attorney General's Office," he told reporters.
The FSPC groups together senior economic ministers, and is in charge of IBRA's high profile debt restructuring deals worth over Rp 1 trillion (about US$96 million)
Syafruddin refused to say the government would immediately take legal action against noncooperative debtors, but did not rule out the possibility either.
On Monday, Coordinating Minister for the Economy, Dorodjatun Kuntjoro-Jakti said the government was mulling over legal steps to force noncooperative debtors into paying.
Tougher legal measures were being prepared after the FSPC extended the debt payment period under the shareholder settlement program to 10 years from four.
The program applies to former bank owners whose banks IBRA took over after the government bailed them out after the 1997 financial crisis.
To repay the bailout costs, the shareholder settlement program required the bankers to surrender their assets.
The program also exempted the former bankers from prosecution, as it turned out that most of the bailout funds were misused.
To date however, most had not begun their debt repayment, while others simply have refused to surrender their assets by bogging down negotiations with disputes over the value of the assets.
IBRA said most debtors deferred payment because four years was too short a period to cover their debts. The agency argued that a 10-year extension was needed to bring in the debt payments.
But that decision drew criticism from bank analysts who accused the government of going soft on noncooperative debtors.
"This is a matter of financial restructuring, by stretching (the payment period) we give them more breathing room," Syafruddin continued.
He reiterated that past deals failed to promote repayment in part because of disputes arising about the value of the assets.
Also, the National Development Program (Propenas), allowed for a revision of the shareholder settlement program, he said.
"After we have gone through that process, we can get tough with them," he explained.
Minister Dorodjatun said that new legal measures against the noncooperative debtors would be discussed next week at the Cabinet meeting.
The new measures are also part of reform targets under the fourth Letter of Intent (LoI) to the International Monetary Fund.
"IBRA intends to take more decisive action against noncooperative debtors....A specific plan to address issues associated with noncooperating debtors will be finalized by the end of March 2002," the LoI said.
It says over Rp 50 trillion in loans are in litigation. Of that amount Rp 13 trillion belong to 49 noncooperating debtors.