Mari queries Texmaco, Chandra Asri deals

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)