Mirzan Fails to Buy Texmaco

MIRZAN Mahathir eventually failed to buy Texmaco Group’s exchangeable bonds worth Rp29.04 trillion offered by the Indonesian Bank Restructuring Agency (IBRA) through its second phase of strategic asset sales.

Junianto Tri Prijono, IBRA Deputy Chief of Administration, said that Utara Capital Consortium, which is led by Mirzan, did not enter their bid on the last bidding process yesterday.

A reliable source involved in the bidding process said that Mirzan failed to buy the bonds since he could not manage to find a business partner willing to develop the Texmaco Textile Division.

With Texmaco unable to sell their exchangeable bonds, it was finally declared that the company had failed to pay the interest of its debt amounting to Rp139 billion. “Basically we can confirm this,” Junianto said.

What will be IBRA’s next step? Mohammad Syahrial, IBRA Deputy Chief of Credit Asset Management, once said that one of the options available for IBRA would be taking over Texmaco share ownership and executing Marimutu Sinivasan’s personal guarantee. Another option is that IBRA will accept a new exchangeable bond as payment for the delinquent interest.

Post-IMF Program

LAST Monday, the government issued Presidential Instruction (Inpress) No. 5/2003 on the country’s post-International Monetary Fund (IMF) economic reform program. The program, however, was heavily criticized.

Coordinating Minister for Economic Affairs Dorodjatun Kuntjoro-Jakti believes that the program can raise the country’s economic growth up to 7 percent. This is expected to boost opportunities for the unemployed, who now number about 40 million people.

Economic observer Umar Juoro, however, does not believe the program is a good strategy. He said that the three main goals covered in the program—maintaining macroeconomic stability, continuing banking sector reform, and increasing investments, exports and employment opportunities—do not reflect priorities and choices of developing real sectors.

Economist Rizal Ramli calls the program bureaucratic since it does not have a quantitative target and lacks a clear-cut policy. Each department has its own policy on implementing the program without any coordination with other departments. Clearly, he believes, the program is still modeled after IMF-style, maintaining a low deficit budget and the privatization of state-owned enterprises.

Sanction for Deutsche Bank

APPARENTLY it is not only local companies that often fail to pay their debts. The well-known foreign company, Germany-based Deutsche Bank has been penalized and not allowed to take part in a bond bidding process three times consecutively. The reason is that the bank failed to pay, in accordance with the schedule, government bonds worth Rp683 billion that they won on September 9 bidding.

All investors who have won government bonds tender should have paid the government by September 11. Deutsche Bank paid the following day. “Why? They say they did not have enough money,” Fuad Rahmany, Chief of Government Bond Management Center, said last Friday.

Some quarters have been surprised to learn that Deutsche Bank failed to fulfill their obligation. The bank is known to always be involved in tendering bonds issued by the government.

Delinquent Taxpayers

DELINQUENT taxpayers seem to like taking risks. They may risk confinement but their number increases. Hadi Poernomo, Director-General for Tax, said that the number of delinquent taxpayers is increasing. Earlier there were only 39 delinquent tax payers, with a total of Rp900 billion delinquent payment; but earlier last week the number increased to 63 people with a total of delinquent tax of Rp1 trillion. Forty-nine out of 63 people are Indonesian and the rest are expatriates.

Hadi warns that if the delinquent taxpayers do not pay by or on September 21, they will be sent to Cipinang penitentiary. The government has prepared a special room for tax evaders there. But the deadline does not seem to be final. As Hadi says, he will give them some more time as a show of good will.

Zurich Life Insurance Moves Out

ZURICH Life Insurance is moving its business out of Indonesia. It has handed over its thousands of clients to Manulife Life Insurance. Zurich Group Indonesia management says that their decision to leave Indonesia is part of their strategy to maintain a more certain profit and growth for the company.

It is not clear, however, what the real reason is for the Swiss-based company to leave Indonesia. Zurich Life has gained a substantial asset worth Rp99.88 billion with 110,000 policyholders. In 2002 it had Rp69.69 billion insurance premiums.

Established in 1991, Zurich Group business in Indonesia has been growing well. Two of its companies, a life insurance and non-life insurance, grow 30 percent each year.