Andromeda drops lawsuit against govt

Andromeda drops lawsuit against govt

JAKARTA (JP): Bank Andromeda withdrew its lawsuit yesterday
against Minister of Finance Mar'ie Muhammad and Governor of Bank
Indonesia Soedradjad Djiwandono over the closure of the bank
citing national interest as the reason.

Bambang Trihatmodjo, a 25 percent shareholder in the bank,
would not elaborate on what he meant by "considering the wider
national interest".

Bambang, President Soeharto's second son, also cited the
current economic situation and Bank Indonesia's approval to allow
Bank Andromeda to repay its depositors with its own funds, as
other reasons for dropping the suit.

"With all sincerity we, through our lawyers, withdraw the suit
at the State Administrative Court," he said.

Lawyers on behalf of Bank Andromeda's owners filed a suit on
Nov. 5 against the Minister of Finance and the Governor of Bank
Indonesia over the decision to liquidate the bank.

Bank Andromeda was among the 16 insolvent banks liquidated as
part of the government's reform package announced after receiving
a US$23 billion bailout from the International Monetary Fund.

The bank was liquidated with a Ministry of Finance decree No.
528/KMK.017/1997, issued after receiving a recommendation from
Bank Indonesia.

The bank closures created a huge controversy as several of the
politically well-connected owners publicly refused to accede to
the decision.

Speaking at a packed press briefing yesterday in the Bimantara
building on Jl. Kebon Sirih, Central Jakarta, Bambang denied he
had been pressured to drop the suit.

The suit was formally withdrawn at the State Administrative
Court in East Jakarta, yesterday by a team of lawyers which
included O.C. Kaligis, Rudhy Lontoh, Hotman P. Hutapea, Denny
Kailimang and Risma Situmorang.

Head of the court, judge Lintong Oloan Siahaan, was pleased
with the decision. "It's a wise step. Personally, I am relieved."

The government had only begun to form its defense team
comprising state prosecutors and private lawyers such as T. Mulya
Lubis and Amir Syamsuddin.

Todung said the withdrawal of the suit was "the best solution
for both parties" and showed that national interest was more
important than personal or group interest.

"This is a win-win solution. What prevails here is logic or
common sense ... We all realize the liquidation is part of the
government's economic reforms and that it's important for this
nation to recover from the crisis," Todung said.

Ventures

Bambang denied yesterday reports that in return for dropping
the suit he would be allowed to take over Bank Victoria, saying
shareholders had not asked anything from the government.

But he expressed hope that shareholders would again be allowed
to venture into the banking sector.

"We hope the government will allow us, shareholders, to again
own banks in the future since we have demonstrated our goodwill
to repay (Bank Andromeda's) depositors," he said.

Bank Andromeda's president Nico Mailangkay said Rp 60 billion
(US$19.2 million) has been readied to finance the repayment.

"The funds will be used for the repayment of deposits of up to
Rp 20 million," Nico said.

He said Bank Andromeda has 24,500 depositors, of which only
3,500 of them have more than Rp 20 million in their deposits.

Separately, representatives of Bank Guna Internasional,
another of the liquidated banks, presented its case but stopped
short of announcing a suit.

Lawyer Talas Sianturi said his clients are still studying all
options.

Bank Guna's spokesman, Jon Masli, maintained that the bank was
perfectly healthy at the time of closure. "We are certain that we
are healthy, but apparently Bank Indonesia did not think so."

Bank Guna Internasional is owned by Hendra Rahardja who owns
another closed bank, Bank Harapan Sentosa.

Asked whether the executives of Bank Guna knew of Hendra's
whereabouts, director Johnlee Mailoa said he had not heard from
Hendra who was abroad when the liquidation announcement was made.

Reports said Hendra was due to return here yesterday from
Singapore.

Meanwhile, Antara reported Hutomo Mandala Putra, President
Soeharto's youngest son, backed the government's move saying the
recent liquidation would make the banking sector more healthy and
competitive.

Hutomo said Bank Utama, in which he is a 30 percent
shareholder, would merge with other private banks later this
year. He refused to name the banks.

Bank Utama was not included in the list of 16 banks closed.

An executive of the Indonesian Chamber of Commerce and
Industry, A.A. Baramuli, stressed the need for banks to merge to
help reduce the existing 224 private banks to between 120 and
130. (10/das)