http://thejakartaglobe.com/business/indonesian-government-and-rni-involved-in-unlawful-debt-deal/333520
October 04, 2009 Janeman Latul Indonesian Government and RNI Involved in 'Unlawful' Debt Deal The government has been surreptitiously using taxpayer money since 2004 to repay debts worth Rp 1.7 trillion ($149.4 million) owed to overseas lenders by ailing state plantation and pharmaceutical company PT Rajawali Nusantara Indonesia, apparently in violation of the law, according to a leaked document obtained by the Jakarta Globe. The briefing document from the State Ministry for State Enterprises to the government describes the history of the RNI loan debacle and what is being done to resolve it. The debts in question were all incurred during the late Suharto years and consisted of loans taken out by the government and then channeled to RNI. Under the covert debt-restructuring deal with the government, RNI has been given 18 years to repay the principal and interest the government has paid to its overseas lenders. Olly Dondokambey, the chairman of the House of Representatives' Commission XI on finance, said it would be illegal to restructure RNI's debts without the House's approval, which he said has not been given. "It has not been agreed to by the House," Olly said. "They will need to talk to us and we will need to ask the [Supreme Audit Agency] to check the plan and RNI itself before we can come to any conclusions." By law, all state debt-restructuring deals involving more than Rp 100 billion must be approved by the House. RNI has failed to reimburse any of the money paid to foreign lenders since 2004 to the government, according to a senior official from the Finance Ministry, who declined to be named. RNI's liabilities are part of Rp 14.5 trillion in problematic debts owed by the country's state firms to the government, the State Enterprises Ministry acknowledged on Friday. "Out of the Rp 14.5 trillion in problematic debts, Rp 5 trillion are categorized as bad debts, including the RNI debts," said Muhammad Said Didu, the secretary at the State Enterprises Ministry. RNI's Rp 1.76 trillion in debts consist of principal of Rp 675 billion and Rp 1.05 trillion in interest and charges, almost twice the size of the original loans. According to the leaked document, the principal is to be repaid by the company to the government in six years while the interest and charges will be paid over 12 years after the principal has been repaid. [Non-text portions of this message have been removed]
