Govt to exclude Salim Group from BCA sale<\/p>\n
Berni K. Moestafa, The Jakarta Post, Jakarta<\/p>\n
Addressing public suspicion that the Salim Group was vying to
\nregain control over Bank Central Asia (BCA) through proxies, the
\ngovernment said Monday it would focus on bidders with strong
\ncredibility in choosing the buyer of a 51 percent stake in BCA.<\/p>\n
A government source also revealed to The Jakarta Post that the
\ngovernment was quietly leaning toward U.K.-based Standard
\nChartered Bank Plc. over other bidders who are vying for control
\nof BCA.<\/p>\n
State Minister of State Enterprises Laksamana Sukardi said the
\ncriteria for determining the winning bid had been completed.<\/p>\n
\"The standard is quite high for the credibility and reputation
\nof the candidate; a financial institution that is reputable, owns
\nlarge capital and has a very good rating,\" he told reporters
\nafter a cabinet meeting.<\/p>\n
\"I, as a State Minister, am in charge of this, there are
\nneither gaps (for Salim to enter), nor quiet deals.\"<\/p>\n
He was referring to BCA's sales procedure by the Indonesian
\nBank Restructuring Agency (IBRA), which is managing the
\ntransaction. Laksamana's office oversees IBRA.<\/p>\n
Once the largest private banks, BCA was taken over and bailed
\nout by the government through IBRA after the bank suffered grave
\nfinancial difficulties in the wake of the 1997 financial crisis.
\nThe bank had also breached the legal lending limit regulations by
\nchanneling most of its money to the Salim Group, the founding
\nowner of the bank.<\/p>\n
The government has barred Salim from regaining control in BCA
\nthis time around.<\/p>\n
Salim also was required to surrender various assets to IBRA to
\nrepay debt to the government, which channeled massive liquidity
\nsupport into BCA during the crisis period.<\/p>\n
But suspicion remains high that Salim, one of the largest
\nconglomerates in Indonesia, intends to regain control of BCA.<\/p>\n
Whispers abound that the group had used proxies to buy back
\nits assets, most notably, the television broadcasting company PT
\nIndosiar Visual Mandiri, and auto manufacturer and distributor PT
\nIndomobil Sukses Internasional.<\/p>\n
To this day, the identity of Indosiar's purchaser PT TDM
\nremains largely unknown by the local media and business community
\nhere.<\/p>\n
Indomobil is now controlled by a group of investors under a
\nconsortium led by PT Trimegah Securities. Their identities are
\nalso somewhat of a mystery.<\/p>\n
A report by AFX-ASIA, quoting Business Times on Monday, said
\nthe Salim Group had raised US$200 million in loans from foreign
\nbanks for the purpose of buying back Salim's assets from IBRA.<\/p>\n
Last week, the Business Competition Supervisory Commission
\n(KPPU) said it planned to investigate the possibly illegal sale
\nof Indomobil and the connection, if any, to the planned sale of
\nBCA.<\/p>\n
The current list of BCA's eight bidders contain perhaps six
\nwith a suspicion of links to Salim.<\/p>\n
Of the eight that made the shortlist, only Standard Chartered
\nand U.S. investment firm Newbridge Capital, were deemed closest
\nto what Laksamana defined as credible.<\/p>\n
Standard Chartered however, has had its share of bad
\nexperiences in the acquisition of a local bank.<\/p>\n
A politically-linked loan scandal at Bank Bali and opposition
\nfrom its employees against Standard Chartered management forced
\nthe multinational bank to scrap the transaction.<\/p>\n
Meanwhile, a government source said Standard Chartered may be
\nlooking for a partner in buying BCA to reduce its exposure
\nlocally and reduce the likelihood of a nationalistic backlash by
\nworkers.<\/p>\n
The source added that the rating of the U.K. bank risked being
\ndowngraded if it pushed ahead for control of BCA.<\/p>\n
BCA is also facing competition from other Southeast Asian
\nbanks in attracting Standard Chartered. The U.K. firm is scouting
\nthe region's retail banks for cheap acquisition opportunities.<\/p>\n
While Standard Chartered may score high in credibility points
\ndue to its reputation, the more urgent question now is how far it
\nis willing to go against the other bidders in terms of BCA's
\nfinal sales price.<\/p>\n
\"We don't want to sell BCA to brokers with unclear ratings,
\nlittle experience in the banking sector or those who are unable
\nto raise capital for the bank in the future,\" Laksamana said.<\/p>\n
The remaining bidders are undergoing a bidding process and a
\nfull examination by Bank Indonesia to gauge the credibility of
\nthe investors but also to filter out Salim's money.<\/p>\n
\"It doesn't take a genius to know the profile of a bidder,\"
\nLaksamana said of the central bank's examination process.<\/p>",
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