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The suit was formally withdrawn at the State Administrative Court in East Jakarta, yesterday by a team of lawyers which included O.C. Kaligis, Rudhy Lontoh, Hotman P. Hutapea, Denny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