Two top officials of IBRA resign

Two top officials of IBRA resign

JAKARTA (JP): Two deputy chairmen of the powerful Indonesian
Bank Restructuring Agency (IBRA) have tendered their resignation
amid rumors of increasing political interference with the agency.

Deputy chairman for the bank restructuring unit (BRU) Jerry Ng
confirmed on Monday that he had submitted his resignation letter
to IBRA chairman Edwin Gerungan.

Separately, Finance Minister Prijadi Praptosuhardjo confirmed
that deputy chairman Mahmudin Jassin for asset management
investment (AMI) had also tendered his resignation.

Prijadi said that Mahmudin would return to the finance
ministry. But the finance minister said that he was still unaware
of Jerry's resignation.

He declined to provide further details.

The IBRA, which controls over Rp 600 trillion (US$64 billion)
worth of various banking assets, is a unit under the finance
ministry.

The agency has five deputy chairmen and one senior deputy
chairman. The other three deputies are in charge of asset
management credit, support and administration and risk
management.

Jerry dismissed speculation that his resignation was prompted
by stronger political intervention in the designing and
implementation of bank restructuring policy.

"There are no elements of surprise (in the resignation)," he
told The Jakarta Post by phone.

Jerry said that he had been discussing his resignation plan
with Edwin since November as most of the major bank restructuring
programs at the agency had technically been completed.

He pointed out the completion of the recapitalization of all
banks under the IBRA in May last year, the merger process of Bank
Danamon with eight other banks, the divestment of 22.5 percent
government ownership in Bank Central Asia (BCA), the technical
preparations for the second divestment program of BCA, and the
settlement of interbank claims.

But sources said that Jerry, a former banker, decided last
year to resign from the agency because he thought he could no
longer work professionally due to increasing political
interference.

The IBRA must first seek approval from the Financial Sector
Policy Committee (FSPC), which groups several senior economic
ministers, before it decides on major bank and debt restructuring
programs.

The FSPC was formed last year following the emergence of the
high profile Bank Bali scandal that badly affected the image of
the IBRA.

But sources said that the FSPC had been too deeply involved in
the bank restructuring program.

The IBRA was strongly criticized by the International Monetary
Fund, when it decided, upon the request of the House of
Representatives, to delay the second divestment of BCA in
December. The government said at the time that the delay was due
to weak market conditions.

The agency now plans to make the divestment sometime in June.
The IBRA will also sell a majority stake in the publicly listed
Bank Niaga.

Another pressing program of the bank restructuring unit is to
improve the capital condition of publicly listed Bank
Internasional Indonesia (BII) and Bank Universal.

The capital adequacy ratio (CAR) of the two banks are still
below 8 percent, the minimum capital standard required of all
banks by the end of this year.

Sources said that the IBRA had already prepared measures to
resolve the problem of BII and Universal, but the FSPC has yet to
give its approval.

The IBRA, set up in 1998, is mandated to raise around Rp 27
trillion in cash this year to help finance the 2001 state budget
deficit.

The BRU unit is expected to contribute around Rp 3.6 trillion
to the Rp 27 trillion target from the sale of BCA and Bank Niaga.

AMI is expected to contribute around Rp 9.9 trillion from the
sale of IBRA equities in various companies.

The IBRA has said that for this year it will concentrate on
selling shares in various companies surrendered by the Salim
Group, the former owner of BCA. (rei)