Bapepam considers tough action against Lippo<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
The Capital Market Supervisory Agency (Bapepam) said it was
\nconsidering taking strong measures against Bank Lippo's
\nmanagement as recommended by the Jakarta Stock Exchange (JSX)
\nafter the publicly listed bank gave misleading information to
\ninvestors.<\/p>\n
Bapepam chairman Herwidayatmo said on Tuesday that an
\ninvestigation currently underway was being carried out in
\ncooperation with JSX and the Indonesian Bank Restructuring Agency
\n(IBRA), and therefore inputs from either institution would be
\nhighly valued.<\/p>\n
\"The JSX has given us substantial reports, and we'll take that
\ninto consideration in taking the final decision, to be announced
\nby the second week of March,\" Herwidayatmo said.<\/p>\n
The JSX earlier ordered the bank's management to submit
\nprogress reports on its financial condition every week, starting
\non Feb. 24.<\/p>\n
Lippo has been under investigation by the capital market
\nwatchdog after months of public outcry over alleged inaccurate
\nfinancial reports issued by Lippo's management, which is being
\naccused of acting on behalf of the bank's former owner -- the
\nRiyadi family.<\/p>\n
The accusations of manipulation emerged late last year, after
\nthe bank issued two different financial reports.<\/p>\n
While in November the reports showed a net profit of Rp 99
\nbillion and a capital adequacy ratio (CAR) of 24.8 percent as of
\nSeptember, another report, issued only a month later, said that
\nthe bank posted Rp 1.27 trillion in losses and saw its CAR
\ndecline to around 4 percent during the same period.<\/p>\n
The management has said that the different reports were due to
\ndifferent treatment with regards to the sharp decline in the
\nvalue of foreclosed assets. In the first report -- which was
\npublished in the media, the decline in the value of assets had
\nnot been obtained.<\/p>\n
That, the management claimed, had pushed the bank's CAR down
\nas it had to set aside around Rp 1 trillion to back up the
\ndeteriorating foreclosed assets. CAR measures a comparison
\nbetween a bank's capital with its risk-weighted assets.<\/p>\n
The foreclosed assets refer to some Rp 2.7 trillion in mainly
\nproperty assets the bank seized from debtors who defaulted on
\ntheir loans before the bank was recapitalized in 1999.<\/p>\n
Nevertheless, allegations have been rife that the bank's
\ndeteriorating capital is only part of maneuvers by its former
\nowner to regain control of the bank.<\/p>\n
Critics said that the maneuvers are only aimed at justifying
\nthe bank's long-standing plans for a rights issue, which is
\nissuing new shares to raise cash to help improve its capital
\ncondition.<\/p>\n
Lippo was recapitalized with Rp 7.2 trillion in state funds.
\nIBRA holds now a 59 percent stake in the bank, cutting the
\nownership of the old owner -- which was represented by PT
\nLippo.Net -- to 8.1 percent.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/bapepam-considers-tough-action-against-lippo-1447893297",
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"sponsor": "Okusi Associates",
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