Lippo management could face dismissal<\/p>\n
Tony Hotland, The Jakarta Post, Jakarta<\/p>\n
Top officials of troubled Bank Lippo may face dismissal if they
\nare found guilty of having intentionally concealed the bank's
\nfinancial situation, according to a senior official of Bank
\nIndonesia (BI).<\/p>\n
"Concealing information is a very serious offense and should
\nbe looked into. The management can be dismissed if they are
\nproven (guilty) as happened with the management of BNI," BI
\nsenior deputy governor Anwar Nasution said on Wednesday.<\/p>\n
The management of Bank Negara Indonesia (BNI) was reshuffled
\nlate last year, and most of its top officials dismissed after the
\ndisclosure of fictitious export credit worth Rp 1.7 trillion
\n(US$141.17 million).<\/p>\n
Anwar refused to comment any further, explaining that he had
\nnot grasped the whole problem and he had not yet received reports
\non the matter from Lippo.<\/p>\n
Anwar was commenting on Lippo's 2003 financial report, made
\npublic on Tuesday, in which it was stated that the bank
\nexperienced a net loss of Rp 515.9 billion last year.<\/p>\n
Its November report, however, showed an Rp 18.6 billion profit
\nwith no indication of losses.<\/p>\n
Lippo president Joseph Luhukay explained that the contributing
\nfactor to the losses was Rp 367 billion in taxes on the bank's
\nunsold foreclosed assets valued at Rp 2.5 trillion.<\/p>\n
These taxes also shot down the bank's 2003 capital adequacy
\nratio (CAR) to 17.9 percent from 21.1 percent in 2002.<\/p>\n
The Indonesian Bank Restructuring Agency (IBRA), which owns a
\n54.9 percent shares in Lippo, has named a consortium led by
\nSwiss-first Asia Global as the preferred bidder for a 52 percent
\nshare of the publicly listed bank. The consortium offered a final
\nprice of Rp 591.5 per share. IBRA has been trying to sell its
\nshares in Lippo.<\/p>\n
Other Lippo shares belong to public investors (35.5 percent),
\nand to Lippo E-Net (9.6 percent), which is controlled by the
\nRiady family. The family once controlled the bank.<\/p>\n
The director of bank licensing and information at BI, Siti
\nFadjriah, said that an assessment of the consortium would not be
\nconducted until the central bank finished scrutinizing all
\ndocuments submitted by the consortium.<\/p>\n
"We're still examining the documents. If they're complete, we
\ncan do a fit and proper test; even by the end of this week," said
\nSiti.<\/p>\n
Asked about the possibility that the consortium would request
\na reduction in the price due to the poor performance of the bank,
\nSiti said that "it was their decision to buy the shares. In
\naddition, IBRA was using the 2002 annual report as the base when
\nselling the shares".<\/p>",
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