BII forced to shake up management<\/p>\n
JAKARTA (JP): Bank Internasional Indonesia (BII), one of the
\ncountry's largest private banks, is reshuffling its boards of
\ndirectors and commissioners amid rumors they do not meet the \"fit
\nand proper\" criteria of the central bank.<\/p>\n
\"We wish to clarify that changes in the boards of directors
\nand commissioners are being proposed to the central bank,\" the
\npublicly listed bank said in a media statement on Tuesday.<\/p>\n
The bank did not provide further details.<\/p>\n
But BII commissioner G. Sulistiyanto said the bank's president
\nIndra Widjaja was among those removed.<\/p>\n
The management shake-up comes amid rumors the government will
\ntake over the bank. BII has flatly denied the speculation as
\ngroundless.<\/p>\n
Sulistiyanto declined to confirm reports that Indra and the
\nother directors and commissioners were removed because they
\nfailed to meet Bank Indonesia's criteria on suitable bank
\nadministrators.<\/p>\n
\"You can make your own conclusions,\" he told The Jakarta Post
\nby phone.<\/p>\n
Officials at the central bank could not be reached for
\ncomment.<\/p>\n
BII, which will hold a general shareholders meeting on Sept.
\n1, said that it appointed Goldman Sachs Group Inc. as its
\nfinancial advisor \"for a long-term strategic plan\".<\/p>\n
Sulistiyanto said that with the reshuffle, BII's founding
\nshareholders would only be represented by one director on the
\nbank's board of directors, compared to three previously.<\/p>\n
BII has been recapitalized, making the government the majority
\nshareholder with 59.2 percent, while the founding shareholders
\nretain about 20 percent.<\/p>\n
BII was founded by the Eka Tjipta Widjaja family, who also
\ncontrols the Sinar Mas Group, the country's second largest
\ndiversified conglomerate.<\/p>\n
Shares on BII dropped Rp 25 to close at Rp 175 on the Jakarta
\nStock Exchange on Tuesday amid reports of the management
\nreshuffle.<\/p>\n
The government has promised it would not change the management
\nteam of a government-sponsored recapitalized bank except if the
\nmanagement failed to meet the fit and proper criteria.<\/p>\n
Under the bank recapitalization program, the government will
\nprovide up to 90 percent of recapitalization costs.<\/p>\n
The country's banking authority has devised a list of criteria
\nfor fit and proper individuals which is designed to prohibit
\ncorrupt bankers from managing local banks.<\/p>\n
Bank owners who committed a banking crime or violated banking
\nregulations also would be forced to sell their ownership.<\/p>\n
Corrupt bankers and bank owners have taken much of the blame
\nfor the banking crisis, which has resulted in the closure of
\nabout 66 banks and the nationalization of 13.<\/p>\n
Restructuring and recapitalization costs are estimated to
\namount to some Rp 550 trillion (US$80 billion), or about half of
\nthe country's gross domestic product.<\/p>\n
The Center for Banking Crisis (CBC), an independent banking
\nwatchdog, said in a statement that it met with central bank
\nexecutives on Monday and briefed them on details of documented
\nevidence that implicated the Widjaja family in a banking crime.<\/p>\n
CIC said Bank Indonesia set up an investigation team to look
\ninto the matter.<\/p>\n
CIC also took issue with a BII internal memo dated Aug. 3 and
\nsigned by Indra Widjaja, which stated the bank would offer Rp 500
\nmillion in rewards to informers who could identify those
\nresponsible for leaking confidential information about the bank.<\/p>\n
\"Given the strong indication that a banking crime has been
\ncommitted by the Widjaja family, CBC strongly recommends that
\nBank Indonesia ban the family from running BII,\" it said.<\/p>\n
The management shake-up at BII appears to validate concerns
\nthat serious obstacles remain for the massive banking
\nrestructuring program.<\/p>\n
BII is one of the few private banks in the country to have won
\ninternational recognition for good management. It also was
\nconsidered among the blue-chip banks on the stock market.<\/p>\n
BII posted a loss of Rp 1.02 trillion in the first half of
\n1999, compared to a loss of Rp 5.41 trillion in the same period
\nlast year. (rei)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/bii-forced-to-shake-up-management-1447893297",
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"sponsor": "Okusi Associates",
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