Texmaco and 19 firms got special loans: BI
JAKARTA (JP): Bank Indonesia's deputy governor Ahjar Iljas said on Friday that Texmaco was among 20 exporting companies which received a preshipment rediscount facility from the central bank through state commercial banks in November 1997.
Iljas confirmed to Antara that some of the companies obtained the preshipment financing facility based on memos from then president Soeharto.
The head of the central bank's department of international economic cooperation and trade, Hendy Sulistyowati, confirmed that the facility was specially created in late 1997 to help exporting companies to increase export earnings in order to replenish foreign exchange reserves.
The central bank's executives were commenting on the allegations that Texmaco's chairman M. Sinivasan obtained US$754 million and Rp 1.9 trillion in preshipment facilities from Bank Indonesia through Bank Negara Indonesia and Bank Rakyat Indonesia between November 1997 and February 1998 through intervention by Soeharto, who resigned in May 1998.
State Minister of State Enterprises and Investment Laksamana Sukardi revealed what he considered a loan scandal at a hearing with the House of Representatives on Monday, and submitted documents on the loans to Attorney General Marzuki Darusman for further investigation on Thursday.
Marzuki declared Sinivasan a suspect soon after receiving the documents.
Separately, Sinivasan's lawyer Adnan Buyung Nasution criticized on Friday Marzuki's decision as too hasty and imprudent because it was made without first questioning Sinivasan.
Buyung wondered how Marzuki could have declared Sinivasan a suspect only a few hours after he received documents on the loans from Laksamana.
He expressed frustration at how Marzuki handled his client, saying Sinivasan deserved fair treatment.
Buyung also accused the mass media of "unbalanced coverage" of the Texmaco loan case, saying the publicity could hurt the giant company which employs hundreds of thousands of workers.
"Once a court found Sinivasan not guilty, it might be too late to save his company," Buyung said.
Hendy said Bank Indonesia did not face risks in extending the preshipment facility because the loans were secured by the state commercial banks that made the disbursements.
"If the corporate borrowers failed to repay their loans, we simply recovered them by charging the loans against the state banks' deposits at Bank Indonesia," Hendy added.
She said the preshipment facility could be used only for working capital to finance exports.
"State commercial banks were liable to penalties for any abuse of loans they disbursed to exporters." However, she did not disclose whether any of the corporate borrowers were found to have abused the facility.
According to Hendy, state banks were fully responsible for assessing the loan applications from exporting companies which intended to use the facility.
Separately, Soedradjad Djiwandono, who was the governor of the central bank when the preshipment facility was created, confirmed in a written interview with Kontan economic newsweekly that the facility was established after a series of discussions involving him, the finance minister, the trade and industry minister, private and state bankers and many senior officials from related ministries.
"The facility was created to help selected exporting companies boost their exports," added Soedradjad, who is now a development associate at the Harvard Institute for International Development in Cambridge, U.S.
The foreign exchange market was then very thin and the dollar supply was quite short, he said in referring to the situation between late 1997 and 1998 when the rupiah collapsed amid the financial contagion which began in Thailand in July 1997.
"The facility was not tailor-made to the Texmaco group but was designed to help exporters," Soedradjad said.
Soedradjad, however, said he was not sure as to whether he had asked Sinivasan to write Soeharto about the loan facility.
"I don't have detailed records on the Texmaco loan case, how much were the loans and which state banks disbursed them," he said.