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Monday, February 06, 2006

Finance Ministry plans new unit to resolve thousands of IBRA cases

Finance Minister Sri Mulyani Indrawati said her ministry was currently handling some 6,000 "unsolved" cases that were handed over by the now defunct Indonesian Bank Restructuring Agency (IBRA).

"There are 6,000 cases that have not been resolved," she told reporters over the weekend. Sri Mulyani said that a new special team must be set up to handle the cases as existing units within the ministry were already overloaded with other tasks.

"What we need is a kind of presidential ruling to set up the team," she was quoted as saying by Antara over the weekend. She did not elaborate.
IBRA was set up by the government in February 1998, but only began activities a year later, and had the mission of rehabilitating the country's collapsed banking sector in the wake of the 1997 regional crisis. IBRA also had the task of restructuring and selling various assets taken over from indebted bankers to help recover the massive US$75 billion in taxpayers' money used by the government to bail out the banks.

The agency was closed down in February 2004, much later than similar agencies in Malaysia, Thailand and South Korea, but its record in terms of asset disposal was lower, averaging only 28 percent, compared with more than 35 percent in Thailand, 29 percent in Malaysia and almost 40 percent in Korea.
IBRA left much unfinished business after it ceased operation, including unresolved legal cases, a majority of which centered on disputed assets taken over from bankers. The total value of the cases at the time of the closure was estimated at around Rp 25 trillion.

Sri Mulyani's statement came as the country's law enforcers investigate alleged corruption committed by former agency chairman Syafruddin Temenggung in relation to the sale of sugar company PT Rajawali III, which according to prosecutors had caused Rp 500 billion in financial losses to the state. Syafruddin has been declared a suspect in the case.

Sri Mulyani declined, however, to comment on the legal measures being taken against Syafruddin. But anti-graft activists have called on the authorities to also probe other former IBRA chairmen and top officials. Many people have long suspected rampant graft within the agency, with accusations that assets belonging to the state were sold at heavily discounted prices.

The Jakarta Post,
February 07, 2006

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