Mega responsible for IBRA debtors discharge: Hamzah

Mega responsible for IBRA debtors discharge: Hamzah

The Jakarta Post, Jakarta

Vice President Hamzah Haz said on Monday that President
Megawati Soekarnoputri may delegate to her ministers the
unpopular move of signing papers that would drop criminal charges
against bad debtors, yet the final responsibility would still
rest with her.

While explaining that the government had to go ahead with the
planned dropping of criminal charges against debtors, Hamzah
pointed the finger at Megawati as being the one responsible for
any such move.

"The signing of the R & D (release and discharge) papers can
be carried out by the coordinating minister for the economy or
the Attorney General's Office, but the one responsible for this
would still be the President," Hamzah told reporters. "Granting
an amnesty comes within the prerogative of the President."

The debate over who should sign the release and discharge
papers has become the latest controversy surrounding the
settlement by ex bankers of their debts to the government.

Having misused around Rp 138 trillion (about US$15.3 billion)
in Bank Indonesia emergency liquidity loans as well as violated
banking regulations, the ex bankers face prosecution unless they
repay the loans that were misused.

This forms part of the deals signed by the ex bankers with the
government under the shareholders' settlement program. Initiated
in 1998 by the Indonesian Bank Restructuring Agency (IBRA), this
program involves 35 bankers whose banks were eventually taken
over by IBRA.

But only recently -- as the deadline for many of the debtors
nears -- have experts raised doubts about the validity of these
agreements.

"According to the law, the settlement of debts comes under the
civil law so that a resolution should come under this category.
This (the civil law), however, cannot erase criminal aspects if
these be found," Hamzah explained, echoing the opinions already
voiced by a number of legal experts.

"So, what we must uphold here are legal principles," he added.

Hamzah's remarks have also added to the political undertones
of the debate following criticism by People's Consultative
Assembly Speaker Amien Rais.

Amien joined in the public outcry against the government last
week, urging it to annul the release and discharge mechanisms
even if the ex bankers repaid all their debts.

Both Hamzah and Amien are viable contenders for the presidency
at the 2004 general elections.

Analysts say that government officials fear a public backlash
if they sign the documents letting some of the country's biggest
tycoons off the hook, leaving the poor to suffer the consequences
of the tycoons' illegal acts.

This year alone, some Rp 59 trillion in taxpayers' money will
have been spent on paying interest on the government bonds that
were issued to cover part of the loans the bankers misused.

This amount will exceed what the government spends this year
on social welfare programs and development projects taken
together.

Government officials denied any finger-pointing in their
ranks, and said they would come to a decision by early next
month.

IBRA has recommended that four bankers be released from the
possibility of criminal prosecution saying that the four have
been cooperative, meaning that they have settled their debts
under the shareholders' settlement program.

But even if the debtors fully comply with the program, the
money IBRA will be able to recover from them will be insufficient
to cover the initial losses.

Analysts have long suspected that the debtors have made
minimal repayments, and surrendered assets only to later buy them
back from the agency at heavily discounted prices using third
parties.