BCA saga set for next stage<\/p>\n
Berni K. Moestafa, The Jakarta Post, Jakarta<\/p>\n
The drawn-out controversy surrounding the sale of Bank Central
\nAsia (BCA) appears to be nearing its climax, as bidders place
\ntheir final bids today. Not so, according to analysts.<\/p>\n
They said the formal bidding process would end, but its
\ncontroversy was far from over. It might linger even after a
\nwinner had been announced.<\/p>\n
Bank Indonesia's announcement last Friday that bidders had
\nuntil today to complete all documentation for their fit and
\nproper test showed that preparations for the sale was still
\nunderway.<\/p>\n
\"The fit and proper test should have been completed long
\nbefore the deadline of the final bid,\" banking analyst at Bank
\nNegara Indonesia (BNI) Ryan Kiryanto told The Jakarta Post over
\nthe weekend.<\/p>\n
The Indonesian Bank Restructuring Agency (IBRA), could not
\nname a winner until after Bank Indonesia had finalized its tests
\non the bidders, he said.<\/p>\n
IBRA is reportedly expecting to name the winner two weeks
\nafter the submission of the final bids today.<\/p>\n
But as the final bids started to come in today, there was no
\nsaying when the fit and proper tests would be completed.<\/p>\n
The longer the wait, the greater the risk of collusion to leak
\nthe final bids and influence Bank Indonesia's judgment, some
\nanalysts said.<\/p>\n
Ryan said this situation inevitably placed Bank Indonesia in a
\nmore strategic position than IBRA, the seller of BCA.<\/p>\n
IBRA, which had defined the bidding criteria for BCA, should
\nhave the final say, he said.<\/p>\n
\"I am afraid IBRA can easily shift the blame to Bank Indonesia
\nshould problems emerge later with the new owner of BCA,\" he said.<\/p>\n
Suspicion has been high that some of the bidders for BCA are
\njust a front for its former owner, the Salim Group, to regain
\ncontrol.<\/p>\n
Salim is banned from buying back BCA after the group, through
\nthe bank, misused some US$5 billion in state funds, which it has
\nnot yet repaid.<\/p>\n
For the mismanagement of BCA, the Salim family has been
\nprohibited by Bank Indonesia from buying a bank or setting up a
\nnew one.<\/p>\n
Bank Indonesia's fit and proper test aims, among other things,
\nto identify bidders' funding sources.<\/p>\n
The tests have come amid public suspicion that the majority of
\nthe bidders were vulnerable to Salim infiltration.<\/p>\n
Most came as consortiums of local bidders, whose source of
\nfunds were none too clear.<\/p>\n
Among the more credible bidders are UK-based Standard
\nChartered Bank Plc., and the U.S. investment firm Newbridge
\nCapital and Farallon.<\/p>\n
The government has shown a strong leaning toward Standard
\nChartered, emphasizing it wanted a strategic investor for BCA.<\/p>\n
But Standard Chartered was still looking for a bidding partner
\nthree weeks before Monday's deadline.<\/p>\n
It subsequently remained silent on whether it had found that
\npartner.<\/p>\n
IBRA plans to sell a 51 percent stake in BCA to help reduce
\nthe state budget deficit.<\/p>\n
Its attempt to sell a stake in BCA to a strategic investor
\nbegan in late 2000 with three delays, mainly due to too much
\npoliticking.<\/p>\n
Now the Business Competition Supervisory Commission (KPPU) is
\nkeeping an eye on the sale process.<\/p>\n
Commenting on the apparent last hurdle in the bidding process,
\nKPPU member Pande Radja Silalahi said the commission would stay
\nactive in ensuring the process continued properly.<\/p>\n
The commission has already expressed concern over IBRA's
\ninability to produce bidding criteria that would best ensure
\n\"clean\" funding sources.<\/p>\n
Pande also questioned the delayed fit and proper test, which,
\nhe said, might extend the sale process by as long as 30 days.<\/p>\n
\"The ideal amount of time required by Bank Indonesia to
\ncarefully examine the bidders would be about 30 days,\" Pande
\nsaid.<\/p>",
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