Jakarta – The government has given the former owners of ailing banks taken over by the Indonesian Bank Restructuring Agency (IBRA) until Wednesday to agree to surrender more assets to ensure they settle their debts or face legal sanctions, reports said.

"The deadline is until Wednesday at seven in the evening," the Jakarta Post quoted Coordinating Minister for the Economy Rizal Ramli as saying late Friday night. "If this is not met, the attorney general has confirmed that he would take necessary action," Rizal told a press conference following a meeting of the Financial Sector Policy Committee (FSPC).

He also said they would be required to give personal guarantees of debt settlement. The FSPC groups senior economics ministers, the attorney general and IBRA, and the committee approves major IBRA deals.

The former bank owners, who are also among the country's top business tycoons, owe hundreds of trillions of rupiah (billions of dollars) to the government in return for massive liquidity support. Many have been found to have violated legal lending limits by channelling the liquidity credits designed to keep them afloat to affiliated businesses instead.

Under an agreement known as the Master of Settlement and Acquisition Agreement (MSAA) signed with IBRA in 1999, they pledged their assets to the IBRA to repay their debts. "We have given them one month ... We will not give them more time because it's useless. They only use it to lobby government officials or legislators to avoid [surrendering more assets]," Rizal said. "They think there are government officials who can bought, but the current [economic] team won't accept bribes," he added.

The minister said the attorney general's office had conducted an investigation and found that the former bank owners still held assets here and overseas. "It turns out that they're not as poor as they had claimed," he said.

Rizal also said the former bank owners would be allowed to repurchase their assets from IBRA only after they have fulfilled their obligations to the government.

"They are welcome to buy back the assets if they have met their obligations," he said, adding that there were "strong indications" that the former bank owners were trying to sneak around the government and repurchase their assets via third parties. "If in the future they are proven to have repurchased their assets, IBRA will take them back," he said.