Garuda Mas denies defaulting on debts

The Jakarta Post , Jakarta | Fri, 06/16/2006 3:09 PM | Business

Benget Simbolon Tnb., The Jakarta Post, Jakarta

The Raja Garuda Mas Group has denied defaulting on its debts to state-owned Bank Mandiri, saying it has consistently paid its installments since the two sides signed a loan restructuring agreement in 2002.

""We signed loan restructuring agreement in 2002 with 15 local and foreign banks, including Bank Mandiri. And since then we've been complying with all the agreed stipulations,"" Ibrahim Hasan, president director of the Raja Garuda Mas Group, told the press Thursday.

He was commenting on media reports, including one carried by The Jakarta Post on Thursday, that Bank Mandiri had named the Raja Garuda Mas Group, a widely diversified company owned and founded by Sukanto Tanoto, as one of 30 defaulting borrowers who owed money to the bank.

Bank Mandiri warned the 30 corporate borrowers with the highest levels of non-performing loans to pay up or face legal action.

Asked whether his company would sue Bank Mandiri for its announcement, Ibrahim said there were no plans to take legal action.

He refused to reveal the total amount of money the group owed to Bank Mandiri, saying ""We can only state that our outstanding debts to the 15 syndicated banks total $1.515 billion, as agreed under the 2002 restructuring deal.""

Since then, he said, the total debt had declined to $1.4 billion.

He declined to say how much money was owed to each of the 15 banks, or release the firm's latest accounts. ""We're doing well. We pay our debts to the banks every month,"" he said.

However, he acknowledged that there had been a demand from Bank Mandiri for an increase in monthly interest payments. ""We don't agree with this. We'll only comply with the terms of the restructuring agreement that we signed with the 15 banks,"" he insisted.

Meanwhile, banking law expert Frans Hendra Winata said that the disclosure of the names of Bank Mandiri's largest defaulting borrowers was unethical.

""It's against the principle of banking secrecy,"" he said, adding that the move could discourage people from taking out new loans from the bank.

Comments (0) | Post comment

A | A | A |