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Indonesia Cracks Down on Debtors - 2002-06-25

The Indonesian government is getting tough on companies that owe it billions of dollars. Among those threatened with possible legal action is the daughter of Indonesia's former President Suharto.

The head of Indonesia's Bank Restructuring Association, or IBRA, said it has given six of the country's largest debtors three months to pay off their debts to the government or else face legal action.

IBRA chief Syafruddin Temenggung said he has the cooperation of the Attorney General's office and the police. "I'll make it very simple to them. You have the obligations, you pay within 3 months. If not, the file will be transferred to the AG and police office. I have very good coordination with the police and also the AG office to follow-up these recalcitrant debtors," he said.

Mr. Temenggung said three more large debtors will be put on a deadline next week. Among them is Siti Hardiyanti Rukmanan the eldest daughter of Indonesia's former President Suharto. IBRA said she has $3.2 million in debt arising from her bank, Bank Yakin Makmur, which was closed four years ago. IBRA is restructuring Indonesia's banking system, which collapsed in the Asian financial crisis that began in 1997. It also is tasked with recovering $16 billion the government spent on bailing out four dozen banks that folded in the crisis. Analysts say so far, IBRA has had little success in recovering the funds. If debtors repay the money they owe the government, Mr. Temenggung said they will be given a discharge, clearing them of any further criminal investigation of those debts.