Two years may sound like a long time to audit a company of about 800 employees ... unless of course the company is in Indonesia. And this is exactly the estimate given by the Indonesian Supreme Audit Agency (BPK), which is going to conduct a comprehensive audit of the Indonesian Bank Restructuring Agency (IBRA), which controls about Rp600 trillion ($63.2 billion) in assets. Bambang Wahyudi, an official of the BPK, said that because of the massive work involved it will take two fiscal years to audit the Agency.

In June 2000, PricewaterhouseCoopers audited IBRA and reported the gross depreciation of some assets, including those of the Salim Group, which have fallen from Rp52 trillion to about Rp20 trillion.

Former owners of banks taken over by IBRA turned over assets in return for liquidity support from the central bank, Bank Indonesia, which poured in about Rp1445 trillion between 1998 and 1999. When in one instance about Rp138 trillion was misused by beneficiary banks for purposes other than preventing massive bank runs, the government was scandalized.

BPK explained that the liquidity support was to pay depositors amid massive bank runs at the time, but many bank owners used the funds for currency speculation and to finance their affiliated companies.

IBRA is a special agency established by the government in early 1998 to help rehabilitate the national economy through the Government Guarantee Scheme, the Bank Restructuring Program, as well as Corporate Loan Restructuring.

In its effort to carry out its mandate, IBRA, on behalf of the government, directly and/or indirectly holds control of assets previously owned by the private sector, through capital injection (the Bank Recapitalization Program), as a creditor (Corporate Loan Restructuring), or through assets pledged as collateral (the Shareholder Settlement Program).

IBRA’s shareholdership in these various assets must be disposed (sold) by keeping in mind the importance of time and achieving an optimum result, and with the consideration that IBRA’s mandate is until the year 2004.