SCB denies conspiring with IBRA over Bank Bali<\/p>\n
JAKARTA (JP): London-based Standard Chartered Bank (SCB)
\ndenied accusations by former Bank Bali president Rudy Ramli that
\nit conspired with the Indonesian Bank Restructuring Agency (IBRA)
\nto take over the scandal hit Bank Bali.<\/p>\n
The take over was ordered by Bank Indonesia after the British
\nbank informed IBRA its due diligence audit of Bank Bali uncovered
\ntwo questionable transactions by the bank's management.<\/p>\n
SCB said it found large interbank loans which were guaranteed
\nby IBRA written off in Bank Bali's June accounts. This accounts
\nfor the payment of Rp 546 billion to PT Era Giat Prima (EGP) by
\nBank Bali for its help in retrieving some Rp 3 trillion in loans
\nfrom three closed banks.<\/p>\n
The second questionable action was Bank Bali's attempt to sell
\na package of large bad loans, which should have been transferred
\nto IBRA under the recapitalization program.<\/p>\n
In a hearing with the House of Representatives last week, Rudy
\naccused SCB of using its own accounting standards in its due
\ndiligence audit, resulting in Bank Bali's recapitalization costs
\nincreasing significantly.<\/p>\n
By marking up the recapitalization costs, SCB was able to buy
\nBank Bali shares at reduced prices, Rudi said at the hearing.<\/p>\n
SCB denied the charge, saying the due diligence audit carried
\nout by public accounting firm KPMG was conducted according to
\nBank Indonesia's standards.<\/p>\n
The increase in recapitalization costs was a result of the
\nfurther deterioration of the quality of Bank Bali's loan
\nportfolio, it said.<\/p>\n
In its due diligence audit, KPMG estimated Bank Bali's
\nrecapitalization costs at Rp 4.3 trillion, much higher than the
\nRp 2.5 trillion estimate of its March audit.<\/p>\n
KPMG audited the bank in March on the behalf of Bank
\nIndonesia, while in July it audited Bank Bali at the behest of
\nthe British bank.<\/p>\n
SCB also said that until Bank Bali was recapitalized through a
\nrights issue, there were likely to be continuing operating losses
\nwhich needed to be included in the recapitalization amount for
\nthe months of April to October.<\/p>\n
Bank Bali's payment to EGP would have increased the
\nrecapitalization cost to Rp 4.8 trillion from Rp 4.3 trillion if
\nit was not identified by Standard Chartered, it added.<\/p>\n
SCB said that with the prompt take over of Bank Bail by Bank
\nIndonesia, the sale of assets could be prevented and the
\ninterests of the government protected.<\/p>\n
The IBRA entered into a strategic partnership with Standard
\nChartered Bank in July, whereby the SCB will head Bank Bali's new
\nmanagement team.<\/p>\n
Bank Bali will soon offer a rights issue to raise some Rp 4.3
\ntrillion to lift its capital adequacy ratio (CAR) to the
\ngovernment-set 4 percent minimum.<\/p>\n
IBRA also signed an investment agreement with Standard
\nChartered, allowing the British bank to purchase part of the
\nrights issue and take a 20 percent stake in Bank Bali, while IBRA
\nwould purchase the remaining rights shares. (02)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/scb-denies-conspiring-with-ibra-over-bank-bali-1447893297",
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