Mari queries Texmaco, Chandra Asri deals

JAKARTA (JP): Economist Mari Pangestu questioned on Thursday the debt settlements for textile giant Texmaco Group and petrochemical firm PT Chandra Asri Petrochemical Center, saying the deals lacked transparency.

"It's a problem because there is no transparency in the process," she said in a media briefing by the Centre for Strategic and International Studies (CSIS).

Mari suspected the government may have given special treatment in the deals.

The government plans to buy out part of Texmaco's debt of some US$1.5 billion through a debt-to-equity swap in a debt restructuring scheme similar to that for Chandra Asri.

In settling Chandra Asri's debt of $1.05 billion, President Abdurrahman Wahid earlier agreed to take over 80 percent of the company through a debt to equity swap.

Analysts have warned that the government may ultimately pay a larger share of Chandra Asri's debt, although Japan's Marubeni Corp. owns 69 percent of the nonperforming loan.

Mari said the complicated debt restructuring deals should be handled by a team of experts instead of the President.

She said it was unclear how the President came to the agreements.

"As a tax-paying citizen I am entitled to ask. I want transparency."

The debt settlements, she added, concerned a large amount of people's money that should not have been left to one person to make a decision.

She said the debt to equity swap deals swelled the government's financial obligation but the public would have to pay.

"He (the President) has to be accountable for his decisions," she said.

Mari acknowledged the President's increasing role in economic decision-making was likely aimed at shielding the decision process from political interference within the government.

Texmaco came under fire last year for obtaining government loans in the past by allegedly colluding with then president Soeharto.

Chandra Asri, which was formerly owned by Soeharto associates, is the country's largest ethylene producer with an annual production capacity of 520,000 metric tons.

The government aims to sell part of its newly obtained share in the company to British oil firm BP Amoco PLC.

Analysts have speculated the government gave in to pressure from Japanese interests out of fear of affecting economic relations with Tokyo.

Abdurrahman gave the final decision on Chandra Asri's debt after meeting Marubeni's president. Marubeni denied on Wednesday that it received a sweetened deal from the Indonesian government.(bkm)