BI urged to divulge list of errant bankers<\/p>\n
JAKARTA (JP): The country's banking authority must disclose
\nthe list of errant bankers to the public in order to increase
\nconfidence among would-be investors, according to a legal
\nconsultant.<\/p>\n
Kartini Muljadi of Kartini Muljadi & Partners law firm said on
\nMonday that disclosing the errant bankers would help mend the
\nimage of the country's cash-strapped banking industry.<\/p>\n
Foreign investors will enter Indonesian banks only if they are
\nconfident their money will not be misused, she said.<\/p>\n
Kartini, one of Indonesia's most experienced lawyers, said the
\n1995 Bank Indonesia decree which stipulated the list of errant
\nbankers was confidential and designed only for the internal use
\nof BI had to be revoked.<\/p>\n
\"It's best if the decree is immediately revoked because it's
\nvery important that those who have breached banking rules be made
\nknown to the public, as well as what measures are to be taken
\nagainst them by the authorities,\" she told a seminar on good
\ncorporate governance.<\/p>\n
Indonesia's banking sector has been devastated by the current
\neconomic crisis, prompting the government to inject more than Rp
\n140 trillion in liquidity support to keep banks afloat and
\nprevent the banking sector from collapsing.<\/p>\n
The banking authority has acknowledged some of the problems in
\nthe banking industry were caused by errant bankers who breached
\nprudential banking rules.<\/p>\n
Bank Indonesia director Subarjo Joyosumarto said over the
\nweekend more than 1,000 people were included on the central
\nbank's list of errant bankers.<\/p>\n
Subarjo said the central bank would not disclose the list
\ndespite increasing public pressure.<\/p>\n
However, he said the central bank had formed a team to
\ninvestigate possible banking crimes at 45 commercial banks.<\/p>\n
He said one case involving two former directors of Bank Jaya
\nhad been handed over to the police.<\/p>\n
He added that two or three similar cases would be investigated
\nand the results would be given to the police.<\/p>\n
The government launched a major bank restructuring program on
\nMarch 13, closing 38 banks, agreeing to recapitalize nine private
\nbanks and taking over seven banks.<\/p>\n
The government expects foreign investors to take part in the
\nrecapitalization of the nine private banks, which is an essential
\npart of the country's bank restructuring program. The program is
\ndesigned to lift the country out of its current economic crisis.<\/p>\n
The government is planning to provide up to 80 percent of the
\nrequired recapitalization funding for the nine banks by issuing
\nbonds.<\/p>\n
Kartini said that in addition to disclosing the list of errant
\nbankers, it also was important that the government protect
\nminority investors in local banks.<\/p>\n
She said that by virtue of its bank recapitalization program,
\nthe government would effectively become the majority shareholder
\nin the recapitalized banks and would dominate the decision-making
\nprocess.<\/p>\n
\"What will be the attitude of the government as the majority
\nshareholder? It's crucial that the government be fair and ensure
\nthat the rights of the minority (shareholders) are honored,\"
\nKartini said, adding that past experiences with state enterprises
\nwere discouraging.<\/p>\n
She said it was important for the government, as the majority
\nshareholder, to appoint directors and commissioners who could
\nuphold good corporate governance at the banks.<\/p>\n
She said that according to government regulations, members of
\na bank's board of directors and bank commissioners could not have
\na criminal record and must have high moral standards. (rei)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/bi-urged-to-divulge-list-of-errant-bankers-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}