Tanri Abeng denies interfering with IBRA's work

JAKARTA (JP): State Minister of the Empowerment of State Enterprises Tanri Abeng denied on Wednesday allegations that he was blocking Indonesian Bank Restructuring Agency (IBRA) attempts to recover nonperforming state bank loans.

"The concept is already clear that the nonperforming loans will only be managed by IBRA," he said at a press conference on the restructuring plans of state enterprises.

He promised all related documents would be handed over to IBRA to allow the agency to accelerate efforts in the recovery of the loans.

"But sorting out the documentation takes quite some time," he said, pointing out that one businessman could hold numerous accounts with the state banks, and the debts may not necessarily fall under the nonperforming category.

He said the banks needed more time to ensure the loans transferred to IBRA were categorized as bad debts.

IBRA has assumed over Rp 100 trillion in nonperforming loans from the country's seven state banks alone, namely Bank Bumi Daya, Bank Dagang Negara, Bank Ekspor Impor Indonesia, Bank Pembangunan Indonesia, Bank Negara Indonesia, Bank Rakyat Indonesia and Bank Tabungan Negara.

But IBRA has become an economic mammoth, controlling over Rp 220 trillion of nonperforming assets from state and private banks and US$10.5 billion in corporate assets pledged by bank owners to repay government debts and trillions of rupiah of non-core bank assets.

The agency has been given four years to sell the assets to help finance the government bank restructuring program.

In the latest letter of intent to the International Monetary Fund, the government said IBRA would focus on reaching a restructuring agreement with the 20 largest debtors.

Debtors failing to reach a restructuring agreement will be liquidated. The restructuring process is expected to start by the end of August. Documentation concerning the nonperforming loans of the 20 largest debtors is expected to be completed by the end of this month.

But IBRA deputy chairman Eko S. Budianto said last week the necessary documents received by the agency so far only represented 10 percent of the nonperforming loans.

His comments raised concerns that the government was dragging its feet in the efforts to restructure the nonperforming loans of the 20 largest debtors, particularly as they are well-connected businessmen.

The government also decided to return to state banks the management of nonperforming loans of less than Rp 25 billion, also raising speculation that the government had succumbed to pressure from the businessmen.

Some have suspected that Tanri was intruding with IBRA's work to restructure the nonperforming assets of the state banks, which would provoke the indebted conglomerates, as they may risk losing their business empires.

Economist Sri Mulyani said the credibility of IBRA had been questioned as too many political interests had interfered with the agency.

She said a credible debt restructuring program was essential for the recovery of the crisis-hit economy.

Head of the Supreme Audit Agency Satrio B. Joedono said early this week the agency would audit IBRA "in the near future", following strong accountability demands from the public.

But economist Anwar Nasution warned that if too many people asked too many questions of IBRA, the agency would no longer have enough time to work. (rei)