Salim may avoid criminal charges

Salim may avoid criminal charges

The Jakarta Post, Jakarta

One of Indonesia's wealthiest businessmen, Salim, may escape
criminal charges on abusing some Rp 52.7 trillion (about US$5.8
billion) in state loans after the Indonesian Bank Restructuring
Agency (IBRA) announced he had settled his debts.

IBRA chairman Syafruddin Temenggung said on Tuesday the number
of bad debtors who had settled their debts with IBRA had grown
from four to five.

"The new one is Salim," Syafruddin said following a meeting
with the Financial Sector Policy Committee (FSPC), which consists
of senior economic ministers overseeing IBRA's high-profile debt
restructuring deals.

The Salim Group was founded by Soedono Salim and is now run by
his son, Anthony Salim. Syafruddin did not say on whom the deal
applied to. "We just reported it (Salim's debt status) and
declared it settled."

Of the 35 ex-bankers who abused a total of some Rp 138
trillion in Bank Indonesia emergency liquidity loans and violated
banking regulations, Salim was the largest debtor.

In a 1998 shareholders settlement program, he and other ex-
bankers agreed to repay the loans in return for avoiding criminal
prosecution.

As part of the deal, IBRA took over their banks and other
assets and has sold many of them to recoup the lost funds.
However, with the repayment deadline expiring for many of the
debtors this years, repayment has been minimal and the recovery
rate on sold assets has been poor.

Plans to excuse from prosecution those debtors IBRA has deemed
as cooperative has been met with public criticism.

Adding Salim to the list will likely add fuel to the current
debate, as his debt settlement record is marked by controversy.

The founder of some of the country's most coveted companies,
Salim has drawn criticism for allegedly regaining control of a
number of the companies previously taken over and sold by IBRA.

Among these companies are car manufacturers PT Astra
International (for Rp 2.1 trillion) and PT Indomobil Sukses
International (Rp 625 billion), television company PT Indosiar
Visual Mandiri (Rp 775 billion) and palm oil firms under Salim
Palm Plantation ($365 million).

Analysts have charged that a number of the buyers acted as a
front for Salim to allow him to regain control of his assets.
Both Salim and IBRA denied the charges.

The sale of Salim's flagship Bank Central Asia (BCA) came
under public scrutiny amid political meddling and charges that
Salim was attempting to regain control of the bank.

It took IBRA nearly two years to sell BCA and the eventual
buyer, an American investment firm that beat out UK-based
Standard Chartered Bank, has raised concern among some parties.

Syafruddin said a team of independent lawyers hired by the
government to assess the status of debtors would decide whether
to recommend dropping criminal charges against Salim.

The final decision rests with the government. As yet,
officials seem to be avoiding the matter in what analysts say is
fear of a public backlash.