Sjahril vows probe into IBRA scandal

JAKARTA (JP): Bank Indonesia Governor Sjahril Sabirin reaffirmed on Tuesday the government's blanket guarantee of interbank loans and asserted that no third-party services were needed to claim reimbursement, an allegation at the center of the Bank Bali scandal.

Sjahril also confirmed that the Indonesian Bank Restructuring Agency (IBRA) transferred Rp 904.6 billion (US$133 million) to Bank Bali as reimbursement for its interbank loans to three banks closed by the government.

He was commenting on allegations Bank Bali paid Rp 550 billion in commissions to Golkar Party deputy treasurer Setyo Novanto and several other businesspeople connected with the ruling party for what were described as their good offices in recouping interbank credits.

"We will investigate whether there were illegal payments related to the reimbursement of the interbank credits to Bank Bali."

Sjahril said the payment to Bank Bali was in line with the government's full guarantee for bank deposits and claims.

"Bank Bali actually claimed more than Rp 1 trillion in interbank loans from IBRA, but not all of the loans met the terms and conditions of the guarantee scheme."

He said the central bank thoroughly assessed claims for reimbursement.

"Interbank loans which turn out to be used by the owners of the bank creditor themselves obviously will not be repaid under the guarantee scheme because they violate the rules on connected lending."

He said IBRA also paid claims from other banks under the guarantee scheme.

Bank Bali, taken over by IBRA on July 23, was put under the management of Standard Chartered Bank in an investment agreement signed on July 26.

Leading opposition politicians and economists urged the government on Tuesday to thoroughly investigate the alleged scandal involving Bank Bali, IBRA and Golkar officials.

Yusuf Faisal, head of the economic department of the National Awakening Party (PKB), said that confidence in the economy could tumble again if the government failed to completely and transparently resolve the matter.

"Foreign investors will be scared to come here because this kind of collusion between IBRA and Golkar officials reflects the lack of legal certainty," he said on the sidelines of a seminar on economy.

Yusuf said IBRA must be free of corruption and collusion because the agency's mission was to raise state revenues through the restructuring and sale of the huge amount of assets under its control.

IBRA possesses about Rp 600 trillion worth of assets from recapitalized, nationalized and closed banks. The agency's task is to raise Rp 17 trillion for the state budget in the current fiscal year alone, and at least Rp 34 trillion next year.

Banking legal expert Pradjoto alleged last week that IBRA deputy chairman Pande Lubis colluded with Setya Novanto and businessman Djoko Chandra to pressure Bank Bali to pay commissions for assistance in recouping Rp 3 trillion ($441.2 million) in interbank claims for liquidated Bank BDNI, Bank Bira and Bank Umum Nasional.

Pradjoto said Bank Bali was forced to ask for the assistance of the three businessmen because of difficulties in recouping the claims.

Under the government's blanket guarantee program, however, IBRA is required to cover all the legitimate obligations of closed banks, except to shareholders.

Pradjoto said IBRA reimbursed Bank Bali for about Rp 900 billion on June 2, and paid Rp 550 billion in commissions to the three men the following day.

IBRA public relations officer Franklin Richard confirmed on Monday that the agency transferred about Rp 904 billion to Bank Bali on June 1.

Pradjoto alleged that part of the fee was transferred to Golkar.

In the gutter

"If this is true, it is humiliating for IBRA, bringing its integrity and reputation down in the gutter," said Pande Raja Silalahi, an economist at the Center for Strategic and International Studies (CSIS), a leading private think tank.

"The agency must clarify these accusations to the public."

Noted economist and former Cabinet minister Emil Salim agreed, saying the House of Representatives should summon finance minister Bambang Subianto.

"In fact, the Election Supervisory Committee (Panwaslu) should also start investigating Golkar," Emil said.

IBRA's top officials, including its chairman Glenn S. Yusuf, have so far declined to meet the media.

"If he (Glenn) can't be open about this, he should resign," Yusuf Faisal said.

"There's no reason or excuse for him to disclaim any knowledge of the reported scam."

Meanwhile, secretary-general of the National Mandate Party (PAN) Faisal Basri said that Bambang Subianto, Coordinating Minister for Economy, Finance and Industry Ginandjar Kartasmita and President B.J. Habibie also should take responsibility if the allegations prove true.

"If this (the allegation) is true, the President has to resign and Golkar has to be liquidated."

He warned that foreign investors would shun the country if the allegations were proved, which could force IBRA to sell its bank assets at vastly reduced prices.

Separately, Setya Novanto denied on Tuesday the allegation that Golkar was involved in his arrangement with Bank Bali.

He described it as a "purely business" deal between Bank Bali and his trading and investment firm PT Era Giat Prima (EGP), which was established in the middle of last year.

Novanto told a news conference that Bank Bali enlisted his company to assist in securing repayment of the credits by IBRA after it encountered difficulties in its own efforts.

He declined to disclose his company's fee.

Golkar chairman Akbar Tandjung also denied on Tuesday that the party was involved in the transaction.

"It is the personal affair of Setya Novanto," he told the private SCTV TV station in an interview.

Akbar said Golkar was ready to be audited concerning the allegations. (rei)