Wise approach needed in handling bad debts
Wise approach needed in handling bad debts
JAKARTA (JP): The government should take a wise approach in
handling the mounting bad debts of private companies owing funds
to state-owned banks, says a noted business analyst.
Christianto Wibisono, the director of the Indonesian Business
Data Center, said yesterday that debt scheduling might be a
better solution for bad debts which have emerged due to marketing
problems.
On the other hand, severe punishment should be imposed on
borrowers which have been involved in bad debts caused by
mismanagement, he said.
"The mismanagement could be engineered and it is a crime, and
could involve bank executives," he said.
Christianto said the debt scandal in the state-owned Bank
Bapindo, involving Eddy Tansil and four top executives of the
bank, is an example of how a borrower and bank executives
colluded to manipulate state funds.
Eddy, charged with manipulating Bapindo's loans of around
US$620 million, is now being tried in court. The four bank
executives are also being tried for their alleged involvement in
the debt scandal.
Eddy is one of the 50 businessmen reported to have incurred
bad debts of above Rp 100 billion ($47.5 million) in the
country's six state-owned banks -- Bapindo, Bank Negara
Indonesia, Bank Bumi Daya, Bank Dagang Negara, Bank Ekspor Impor
Indonesia and Bank Rakyat Indonesia.
Assessment
Christianto suggested that assessing the external and internal
factors of borrowing companies is essential so that the handling
of bad debt problems could be carried out effectively.
"If the solution is wrongly handled, the managing of bad debts
could strongly affect the country's economy," he said, adding
that debt relief in the form of debt rescheduling could be
extended to borrowers, who could not pay their debts due to
marketing failure, while those who abuse loan facilities should
be taken to court.
"The rescheduling of Gemala Group's debt of $30 million to
Bank Bumi Daya, for example, is beneficial for both the borrower
and the lender," he said.
Bank Bumi Daya was reported to have rescheduled the Gemala
Group's debts of around $30 million, extended by the bank to
finance the group's purchase of a battery plant in Britain.
Christianto said that Gemala Group is one of a number of
Indonesian companies which failed to manage their overseas
operations effectively due to their lack of experience.
"Mantrust, Bentoel, Summa and even Salim Group also had a
bitter experience in their overseas operations," he said. (hen)