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Ibra to be probed for holding back funds

Straits Times - June 24, 2000

Robert Go, Jakarta – The Indonesian Bank Restructuring Agency (Ibra) would be investigated for holding back nearly eight trillion rupiah (S$1.68 billion) worth of funds that should have been deposited into the state treasury, said the agency's supervising cabinet minister.

Finance Minister Bambang Sudibyo first raised public questions regarding the existence of an undeclared 7.8 trillion rupiah in Ibra's accounts last Monday.

"All incomes and interests received by Ibra has to be handed over to the state treasury," Mr Bambang said on Thursday during a meeting with parliament's Finance Commission.

"Ibra should have deposited at least 3 trillion rupiah by March 31, 2000. But they clearly withheld the money and that was a mistake," he added. For the fiscal year ending in March, Ibra was obligated to submit 17 trillion rupiah to the state's coffers. The agency, however, only paid out 14 trillion rupiah in cash and tendered recapitalised assets worth 4.2 trillion rupiah to make up the difference. Mr Bambang now wants to know why Ibra did not pay out its full budgetary target in cash when it clearly had the money.

Ibra Deputy Chairman Arwin Rasyid explained the extra money is kept in the form of interest-generating time deposits and Bank Indonesia bonds. "We will deposit 4.5 trillion rupiah to the state's accounts soon and submit the remainder according to the Finance Ministry's schedule," he said. "Ibra has not broken any law," Mr Arwin added, "as without proper management, the money was dead money".

Asked to explain what would happen to the rest of the extra funds, the vice chairman said Ibra is entitled to use the sum for operational costs and to finance future restructuring programmes.

Mr Arwin is already under fire from the administration for admitting earlier this week the agency has been able to sell only 2.5 per cent of its US$66 billion in assets during its two-year history.

Finance commission member Dudi Makmoen Moerad criticised Ibra's procedures and called for a full independent review of the agency. "The amount of money in question is too large to be ignored. We need to have more details on Ibra's operations, specially in light of its poor achievement so far," he said.

In addition to discussions on the extra Ibra funds, the parliamentary commission also received reports from the Finance Minister on the status of an oversight board planned for Ibra in accordance with Indonesia's agreements with the International Monetary Fund.

"Ibra would be more transparent and effective in its decision-making process," Mr Bambang said, projecting more development on this issue by early July. Ibra was formed in 1998 in order to help revamp Indonesia's banking sector. Its current mandate ends in 2003.