Sjahril vows probe into IBRA scandal

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)