Six tycoons to have their BLBI cases closed
Six tycoons to have their BLBI cases closed
Abdul Khalik, Jakarta
The Attorney General's Office (AGO) will soon issue orders to
halt the investigations into six former bank owners accused of
misusing bank bailout funds disbursed by the government via the
central bank in the wake of the late 1990s financial crisis.
AGO spokesman Kemas Yahya Rahman said on Tuesday that the
decision had been made after the government declared that the
businessmen had repaid their debts to the state.
"We have received six letters from IBRA stating that the six
tycoons repaid their debts recently. We are now examining the
validity of the letters, and will soon halt the investigations,"
said Kemas, referring to the now defunct Indonesian Bank
Restructuring Agency, a special government agency set up in 1998
with the task of, among other things, recovering the emergency
funds from recipient banks. Despite its official closure in
February, the agency was still give time to settle unfinished
affairs.
Kemas declined, however, to give the precise date when the AGO
would issue the orders.
The six debtors are The Nin Khong of Bank Baja Internasional;
Husodo Angkosubroto of Bank Sewu International; Hasyim
Djojohadikusumo, the former owner of Bank Papan Sejahtera, Bank
Istimarat and Bank Pelita; Hokiarto of Hokindo Bank; The Ning
King of Dana Hutama Bank; and Muhammad Bob Hasan of Bank Umum
Nasional.
The AGO had previously decided to halt the investigation of
Sjamsul Nursalim, the former owner of the now defunct Bank BDNI.
The six former bank owners received a combined Rp 9.5 trillion
(US$1.05 billion) in government funds to help their banks stay
afloat amid massive runs on the country's banks at the time as
public confidence in the banking industry collapsed.
The government via the central bank channeled a total of Rp
144.5 trillion worth of funds under the Bank Indonesia liquidity
support scheme, or what are familiarly referred to as BLBI funds.
But the Supreme Audit Agency (BPK) later said that a huge portion
of the funds had been misused by the former bankers (39 bank
owners received the funds). Among the abuses that occurred were
the use of the funds to speculate against the rupiah
(contributing to the steep drop in the local currency's value at
the time), and the diverting of the funds to affiliated
businesses. Many of the bank owners had also used most of their
banks' funds to finance affiliated businesses, thus violating
legal lending limit rulings.
Despite these crimes, the government, which for years had been
unable to force the ex-bank owners to repay the funds, promised
they would be released from criminal liability (for violating
bank rulings and misusing the BLBI funds), if they settled their
debts to the state.
President Megawati Soekarnoputri issued a decree in 2002 to
put this controversial policy into effect.
Some 14 ex-bank owners, many of them well-connected
businessmen, finally agreed to repay the money via a combination
of cash and fixed assets. IBRA has issued debt-free certificates
to these bankers.
Kemas said that so far, the AGO had only received seven
letters from the government confirming the debt-free status of
the seven ex-bank owners (including Sjamsul).
He said that his office would continue to abide by the
procedures stipulated in Presidential Decree No.8/2002, which
provides that the AGO is required to halt the investigation of
BLBI debtors who have settled their obligations to the state.
He also denied accusations that the AGO had been bribed to
stop the investigation of the former bank owners.
Many experts say that the assets surrendered to the state in
repayment of the tycoons debts were worth much less than had been
claimed by the ex-bankers, leaving the taxpayer to shoulder the
losses.
The Supreme Audit Agency (BPK) is now auditing the assets
surrendered by the former bank owners. Agency chief Satrio B.
Judono has said that his organization might challenge the
government's policy, which, if the challenge were to be
successful, would mean that the AGO could reopen the cases.