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Indonesia seizes land, other assets linked to 1998 bailouts

JAKARTA : Indonesian authorities have seized 5.3 million sqm (530 hectares) of land and property assets in several cities, as part of efforts to recoup unpaid state loans given to banks during the Asian financial crisis in 1998, a minister said.

The land was used as collateral for bailouts and included 251,992 sqm (25.2 hectares) in Tangerang, west of capital Jakarta, previously owned by PT Lippo Karawaci, saidchief security minister, Mahfud MD, who did not name other owners.

The minister made the comments during a news conference held on the confiscated land, where authorities had put up a sign declaring it had been taken over by the state.

Mahfud said Lippo Karawaci and the now defunct Lippo Bank had handed over the land to the Indonesian Bank Restructuring Agency to reduce debt.

The land previously held by Lippo had been under the government's control for 21 years and the property company had no outstanding debt to the state, Danang Kemayan Jati, head of corporate communication at Lippo Karawaci, told Reuters.

"We support efforts by the government to restore state assets," he said in a text message.

Friday's move was the first seizure announced by a new task force that President Joko Widodo formed earlier this year to go after unpaid liabilities totalling 110.45 trillion rupiah (US$7.66 billion), owed by bank owners and debtors.

The liabilities were part of the billions of dollars of financial support the government gave lenders during the 1998 crisis to keep them afloat as Southeast Asia's largest economy slumped amid riots that helped topple the strongman president Suharto.

Hutomo "Tommy" Mandala Putra, the late president's youngest son, had also been summoned over an outstanding debt of 2.6 trillion rupiah related to the bailouts, Mahfud's office said earlier this week. Tommy could not immediately be reached for comment and media reported his lawyer had attended,

Finance Minister Sri Mulyani Indrawati told the same news conference that the task force will try to go after overseas assets next.

(US$1 = 14,415.0000 rupiah)

(Reporting by Gayatri Suroyo, Stanley Widianto, Bernadette Christina Munthe and Agustinus Beo Da Costa; Editing by Martin Petty and Ed Davies)

Source: Reuters

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