Unibank closure draws back Sukanto Tanoto despite exit
Berni K. Moestafa and Moch. N. Kurniawan, The Jakarta Post, Jakarta
Sukanto Tanoto may seem to have had nothing but good intentions when in 1999 he relinquished his majority stake in the ailing Unibank, giving the bank a second chance with new owners.
But it has backfired. Questions surfaced about his motive for giving up control, after Bank Indonesia closed Unibank on Monday.
Unibank's closure left behind some US$230 million in unpaid export facilities with no owner taking responsibility for disbursing them.
The loans were channeled into pulp and wood-based business group Raja Garuda Mas (RGM). At that time Unibank was run by Sukanto, the owner of RGM.
Bank Indonesia has said that even though Sukanto no longer had a minority stake in Unibank, he was responsible for the unpaid loans.
Sukanto's lawyer Alamsyah Hanafiah rejects this claim.
"He (Sukanto) is not part of the management, not on the board of commissioners and he is not a shareholder; legally there is no link to the bank," he told The Jakarta Post on Tuesday night.
Now with no one to held accountable, the Indonesian Bank Restructuring Agency (IBRA), which has handled Unibank's closure, faces difficulties in recouping public funds to be used to cover the bank's third party liabilities.
The liabilities amount to some Rp 3.1 trillion, which the government will pay out to Unibank's clients under a blanket guarantee scheme.
The assumption of responsibility for the loans by Sukanto is seen as vital to allow IBRA to seize his assets and use them as collateral for the unpaid loans.
His exit in 1999 gave way for new owners whose identities were, according to local news reports, unknown to Bank Indonesia.
Some suspect, the new owners were just acting as a front for Sukanto to get rid of his stake in the distressed bank.
Born in Belawan, North Sumatra in 1949, Sukanto Tanoto alias Lim Sui Hang is one of the founders of the RGM business empire.
The group, originally a pulp and wood-based business, has numerous forestry concessions and pulp and paper operations.
RGM later expanded into textiles, palm oil, banking and financial services. In 1997, Sukanto was said to rank among the 100 richest men in Asia.
One of his well known businesses is the publicly listed PT Indorayon Utama Inti, a pulp producer whose operation in Sumatra ran into trouble with locals.
RGM is known among the international finance community as Asia Pacific Resources International Holding Ltd (APRIL).
In an uncannily similar scenario to the now heavily-indebted Asia Pulp & Paper (APP), the Singapore-based APRIL went public at the New York Stock Exchange raising $150 million for its expansion plans.
Supplied with fresh capital, APRIL set up PT Riau Andalan Pulp and Paper (RAPP), PT Riau Andalan Kertas, and PT Riau Prima Energi in Riau.
The three firms took up new loans amounting to $2.1 billion, of which $2 billion were lent under a syndicate of local banks.
Of these loans, some $220 million turned sour. They were transferred to IBRA, along with debts of $70 million from other businesses of Sukanto.
A 1999 debt restructuring deal between APRIL and its creditors, faltered as pulp prices remained sluggish.
One analyst said the restructuring was simply flawed, ignoring the slump in the pulp industry.
Now concerns run high about the adverse impact APRIL's debts might have on its lenders. Among them are Bank Mandiri, Bank Universal and Bank Negara Indonesia (BNI).
Sukanto and his lawyer, Alamsyah, could not be reached for comment.