Robert Go, Jakarta – Indonesia's tycoons are privately selling millions of dollars worth of assets to their foreign partners, but government officials who are just becoming aware of the trend want to clamp down on such deals.
A source close to economic czar Rizal Ramli said that in addition to completing these low-key transactions, some businessmen had kept prime assets off the table during asset-for-debt negotiations two years ago.
Recent sales by the diversified Bakrie and Salim groups of stakes in two separate petrochemical projects, and deals rumoured to be in the works involving two sons of former president Suharto and timber tycoon Prajogo Pangestu have ignited government calls for a renegotiation of earlier agreements.
"There is a clear indication that conglomerates kept the good stuff out of the negotiations and instead pushed forward questionable assets," the source said.
While insisting that "there is no need to make a big deal about the matter now", he indicated that the government would re-engage the conglomerates next month to discuss how to minimise financial losses to the state.
"Setting the figures straight may involve targeting government acquisition of key assets that are currently still in the hands of the conglomerates," he said.
The government, through the Indonesian Bank Restructuring Agency (Ibra), is currently sorting through a paperwork morass as it attempts to restructure and sell off transferred assets.
The source declined to elaborate further on which companies may be in the government's sights, saying: "It is not difficult to come up with blue-chip assets that can more sufficiently cover certain conglomerates' remaining obligations. "The government hopes for cooperation and urges those who will sit across the table to come clean."
Legislator Benny Pasaribu, who chairs parliament's finance committee, told The Straits Times there was a widely-held view that some Indonesian business leaders have engaged in transactions to "cheat the country". "Conglomerates who still owe money to the state should need approval from Ibra, or the Ministry of Finance, if they want to sell assets independently," he said.
Allegations that assets transferred from conglomerates to the state were over-valued by as much as 70 per cent surfaced prior to the dismantling of President Abdurrahman Wahid's first Cabinet in August.
Former economic tsar Kwik Kian Gie brought the issue into the open when he revealed in July that the 108 former Salim Group companies under Ibra management might be worth as little as 20 trillion rupiah – or 40 per cent of Salim's obligations to the state.
Government officials were also keen to point out that some conglomerates have not repaid loans to banks that were taken over by Ibra in the wake of the banking meltdown in 1998.
"Conglomerate owners who are potentially pocketing money through these sales, while they have not shown the goodwill to repay loans, are walking a very thin line," said Mr Benny. "In that case, it will be up to the state to act in a decisive manner to recoup public funds."