A lesson from Lippo

The case of Bank Lippo has lately dominated the headlines of Indonesian dailies but there has been no significant effort on the part of the government to settle the matter.

The Capital Market Supervisory Agency (Bapepam), which has a key role in settling the problem, has been collecting data about the bank's performance. The agency will announce the results of its investigation to the public in March.

The Lippo case stems from two different financial reports. The first report, issued in November last year, said that Bank Lippo's total assets and profits stood at Rp 24 trillion and Rp 99 billion, respectively.

The second report, issued in December last year and sent to the Jakarta Stock Exchange, estimated Bank Lippo's total assets at Rp 22.8 trillion but noted that the bank had suffered Rp 1.3 trillion in losses.

Both reports had been audited.

The government, the largest shareholder in Bank Lippo, should have played a role in the bank's policies. Unfortunately, the bank's former majority shareholder, who now has control over only a minor stake, has become a decision-maker in the ailing bank.

There have been reports that the former majority shareholder wants to regain control over the bank, buying back its share at the lowest possible price. This controversy would certainly help that, considering that the bank's share prices have decreased due to the loss.

The government should finally learn a lesson from the Bank Lippo case, as it has been misled by dishonest tycoons many times in the past.

The Bank Lippo case will become a bad precedent if the government does not take action.

-- Republika