Bank Lippo recapitalization contract questioned<\/p>\n
Zakki Hakim, The Jakarta Post, Jakarta<\/p>\n
A May 2000 agreement that allows Bank Lippo's former owner to
\nrepurchase shares in the bank from the Indonesian Bank
\nRestructuring Agency (IBRA) has the potential to cause the state
\nmassive losses, a legal expert said.<\/p>\n
Law expert Sutan Remy Sjahdeini told The Jakarta Post on
\nThursday that all signatories to the deal could be charged for
\ncorruption according to the Anticorruption Law.<\/p>\n
The central bank is currently investigating an alleged scam
\ncommitted by Bank Lippo management. Previous reports alleged that
\nthe bank's management had made maneuvers that were against the
\nlaw in a bid to help the former owner regain control of the bank
\nfor a very low price at the expense of the state.<\/p>\n
Remy was referring to an amendment of the Investment and
\nPerformance Agreement (IMPA), which is a contract between IBRA
\nand publicly listed Bank Lippo, when the government injected some
\nRp 6 trillion (about US$ 675 million) worth of bonds in 1999 to
\nrecapitalize the bank.<\/p>\n
Under the second amendment of the IMPA, the former owner of
\nthe bank is obliged to purchase IBRA's shares in the bank upon
\nthe agency's request. Within four years after the amendment was
\nsigned, the total value of shares to be purchased amount to Rp
\n300 billion.<\/p>\n
But Remy said that the amended contract did not specify the
\nprice of the shares.<\/p>\n
This apparently tempted the bank's former owner to attempt to
\nmake the market price of the shares decrease in order to regain
\ncontrol of the bank at a very low price, he added.<\/p>\n
\"This would cause the state to suffer financial losses,\" he
\nsaid.<\/p>\n
IBRA, which represents the government, now controls a 59
\npercent stake in Bank Lippo as a result of the government
\nprivatization program.<\/p>\n
Remy urged the agency to explain to the public why it had
\nagreed to the amended version of the IMPA.<\/p>\n
But IBRA spokesman Rohan Hafas rejected the charges, saying
\nthat IBRA would not request Bank Lippo's former owner to exercise
\nthe put option policy if the price was not right.<\/p>\n
\"Yes, the former owners may buy back Lippo shares but only if
\nthe price is right, so there won't be any losses to the state,\"
\nhe told the Post.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/bank-lippo-recapitalization-contract-questioned-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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