Lippo gets new management, Mochtar retained as chairman<\/p>\n
Zakki Hakim, The Jakarta Post, Jakarta<\/p>\n
Shareholders of publicly listed Bank Lippo appointed Joseph
\nLuhukay as the new president of the bank at an extraordinary
\nshareholders meeting on Tuesday.<\/p>\n
But the meeting retained former controlling shareholder
\nMochtar Riady as chairman of the board of commissioners, a
\ndecision which some said could derail efforts to instill investor
\nconfidence in the bank, whose image has been tarnished by reports
\nof financial scams, allegedly conducted by the former management.<\/p>\n
Syafruddin Temenggung, the chairman of the Indonesian Bank
\nRestructuring Agency (IBRA), which holds a controlling 59 percent
\nstake in Bank Lippo, declined to explain to the media why the
\nagency defied public concern by retaining Mochtar as the bank's
\nchairman.<\/p>\n
The move to reshuffle the management of Bank Lippo came
\nfollowing reports of alleged financial scams aimed at allowing
\nthe Riady family to regain control of the bank for a very cheap
\nprice at the expense of the state, which bailed the bank out
\nduring the late 1990s banking crisis.<\/p>\n
The Riady family currently holds a 9.5 percent stake in Bank
\nLippo, while the remaining shares are held by minority investors.<\/p>\n
The country's banking and capital market authorities are still
\ninvestigating the alleged scam. The Capital Market Supervisory
\nAgency (Bapepam) recently imposed a penalty of Rp 2.5 billion on
\nBank Lippo's management for issuing misleading information to the
\npublic in November last year.<\/p>\n
Luhukay is an executive at consulting firm Ernst & Young and
\nwas a former chief operating officer of the Jakarta Initiative
\nTask Force, which is in charge of facilitating debt restructuring
\ntalks between local firms and foreign creditors. He replaces I
\nGusti Made Mantera.<\/p>\n
In addition to Luhukay, five other directors were also
\nappointed by IBRA. Two other directors represented the Riady
\nfamily.<\/p>\n
On the nine-member board of commissioners, IBRA assigned five
\npeople, while the three others are Roy Tirtadji, Rudi Toha
\nBachrie and Masagoes Ismail Ning, who are closely associated with
\nthe Riady family. They were also on the board previously.<\/p>\n
Meanwhile, the chairman of the Indonesian Security Investors
\nSociety (Missi), Murdani, said as a minority shareholder he was
\ndisappointed because the interests of the former owner remained
\nstrong as reflected in the new management composition.<\/p>\n
He was hoping that no family members or people closely linked
\nto the former owner would sit on the Bank Lippo board of
\ndirectors and commissioners in order to restore the bank's image.<\/p>\n
\"I don't expect the new management to deliver significant
\nimprovement,\" he said.<\/p>\n
Separately, State Minister of State Enterprises Laksamana
\nSukardi said that the government had violated the IMPA agreement
\nby assigning more than two nominees to sit on the board of
\ndirectors and commissioners.<\/p>\n
But he said that the move was needed to help resolve the image
\nproblem of Bank Lippo.<\/p>\n
He said that the new management composition was a result of
\nnegotiations with the former owner of Bank Lippo.<\/p>\n
The IMPA agreement is a document containing the details of a
\nbank recapitalization agreement signed in 1999 by the government
\nand the former owner. The contents of the document have never
\nbeen disclosed to the public.<\/p>",
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