JAKARTA
- Though now defunct, the Indonesian Bank Restructuring
Agency (IBRA) remains prominent in the current two-month
changeover period to a new way of managing debt
restructuring and asset sales.
A new Assets Management Company (AMC)
took over the function of IBRA when the latter closed
shop at the end of last month. It is tasked with
managing and restructuring IBRA's remaining assets,
worth some Rp40 trillion (US$4.6 billion).
It
needs money to get on with the job. Though the new
company will get Rp300 billion ($35 million) in
operational funds from the Ministry of Finance, already
agreed by the House Commission IX for financial affairs,
disbursement still needs majority approval from the full
House of Representatives, which is currently in recess
until after the April 5 legislative elections.
Help was on hand, though, from IBRA. The agency
this week transferred a total of Rp150 billion ($17.5
million) to its successor in the form of a loan.
"The sum can hopefully be used by AMC to start
its operations," IBRA chairman Syafruddin A Temenggung
said on Tuesday, adding that IBRA would eventually
return the repayment to the Ministry of Finance as part
of IBRA's additional revenue to the state.
Temenggung, who took over at IBRA in April 2002,
heads a team of some 100 former IBRA employees given
until April 30 to hand over to the new company.
He said IBRA still controlled funds of about Rp3
trillion to Rp4 trillion, which would be transferred to
the Ministry of Finance in April. This is apart from the
Rp5 trillion IBRA generated from sales of assets under
its control and delivered to the government to support
last year's state budget.
AMC is under the
supervision of the Ministry of Finance, unlike IBRA,
which was controlled by the Ministry of State
Enterprises. Also unlike IBRA, it will have no fiscal
targets to meet. However, it has plenty of work ahead to
sort out the unsold assets IBRA handed back to the
ministry. These are in the form of shares in banks,
non-performing loans and property and shares in a number
of companies.
IBRA transferred assets with an estimated
market value around Rp15 trillion ($1.75 billion).
The new Assets Management Company, which has a
five-year tenure and is led by a senior ex-IBRA
official, will manage assets with a total market value
estimated at Rp10.8 trillion. These are assets deemed
"free and clear" in terms of legality, though their book
value is some Rp108.5 trillion.
A special top-level
clearance team will manage the remainder before
being submitted to the Assets Management Company.
The team will be chaired by Finance Minister Boediono,
with State Minister of State Enterprises Laksamana
Sukardi as vice chairman, and National Police Chief Da'i
Bachtiar, Attorney General M A Rachman and Minister of
Justice and Human Rights Yusril Ihza Mahendra as
members.
The new arrangements are all covered by
presidential decrees. Six years after a Suharto
presidential decree set up IBRA in February 1998, a
presidential decree from Megawati Sukarnoputri
officially closed the agency this February 27. Another
decree established the "clearance team" for six months,
and a third authorized the continuation of the bank
blanket-guarantee program.
The presidential
decree allowed for six months for the clearance team to
settle IBRA's affairs. If at the end of the period the
team has not finished its tasks, the government will
approve an extension for as long as necessary.
Boediono wants the state budget funds, which
will be returned before the end of the year, from part
of the proceeds raised from the sale of the assets, as
quickly as possible. This is to maintain and manage the
assets to prevent their value from declining and to
protect them from being "looted", as the minister put
it.
The
government has asked the Supreme Audit Agency
(BPK) to audit the assets transferred from IBRA, but
Boediono told legislators that the Assets Management
Company would start selling them straight away to avoid
a further decline in the value of their assets, though
he promised there would be no fire sale. Some former
bank owners have been cleared of criminal charges,
despite their violation of banking regulations and their
alleged misappropriation of the bailout funds.
The government injected Rp144.5 trillion (some
$17 billion at today's value) in emergency liquidity
funds to banks to bail them out in the wake of the late
1990s financial crisis.
Some 35 bank owners have
been charged with violating banking regulations, mainly
by channeling depositors' money to affiliated business
groups, which hastened the collapse of the banks and
forced the government to bail them out.
As IBRA
struggled to get to grips with the scale of it all,
credit assets were bought back by previous owners with
hardly any capital.
IBRA had already awarded
debt free status to nine ex-bank owners, including
Anthony Salim, the former owner of Bank BCA and the
largest debtor. Last week four more were given a clean
bill of health by the still powerful Financial Sector
Policy Committee (FSPC) established by a presidential
decree in 1999.
To repay their debts, bank
owners surrendered cash and assets to IBRA, but most
assets were found to have much less market value than
claimed. In the Salim case, for example, IBRA collected
around Rp20 trillion from the sale of shares in 108
companies surrendered by Salim to pay off his Rp52.7
trillion debt to the state.
This frees the
ex-bank owners from any legal action for possible
banking crimes committed in the past.
The
Supreme Audit Agency (BPK) has deployed no fewer than 30
auditors to examine the performance of IBRA. The
auditors have been investigating IBRA's performance for
14 months so far and will eventually follow this with an
audit of the agency's final balance sheet.
Boediono admits the results are eagerly awaited.
If these audits uncover any improprieties, then a
further transparent audit investigation is to be carried
out. Because of the corrupt legal system the agency
preferred to seek out-of-court settlements, and there
are still 1,361 unsolved legal cases, the majority of
which center on asset disputes. The cases are worth a
total of Rp25 trillion and involve 447 debtors.
Other unfinished business includes the
liquidation of closed down banks, resolution of the
Shareholders' Liability Settlements (PKPS) of banks that
were closed down by the government as well as the
settlement of ongoing business transactions.
To
provide some assurance for bankers and their customers,
IBRA's role in the government's bank deposit guarantee
program will be taken over by a new institution under
the Ministry of Finance.
This is a temporary
measure, pending the planned establishment of a
full-blown deposit-guarantee agency.
As for
IBRA, more than 70 percent of its 2,500 employees have
been absorbed into the new asset-management body and top
officials have been snapped up by other companies.
Temenggung is now a member of the Pertamina board of
commissioners and his deputy, Sumantri Slamet, has
landed on his feet with a vice president commissioner
post at Bank Internasional Indonesia.
(Copyright
2004 Asia Times Online Co, Ltd. All rights reserved.
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