Tanri Abeng denies interfering with IBRA's work

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)