Andromeda may challenge bank closure in court

Andromeda may challenge bank closure in court

JAKARTA (JP): Bank Andromeda's owners may challenge Minister
of Finance Mar'ie Muhammad's decision to shut the bank in the
Jakarta Administrative Court, shareholder Bambang Trihatmodjo
said yesterday.

Bambang, one of President Soeharto's sons, said the
government's decision to close down the bank had come as a
surprise.

He questioned the decision because he said the bank's only
violation was the legal lending limit requirement.

Bank Andromeda executives acknowledged that they had violated
the legal lending limit by providing loans totaling US$75 million
to some of its shareholders. Bambang claimed that as far as the
legal lending limit requirement was concerned, 90 percent of
Indonesian banks had already violated it.

"The closure of the bank concerns my credibility as well as
that of other shareholders," he said.

Bambang heads the giant holding company Bimantara Group which
owns 25 percent of the bank.

"If possible I will take legal steps at the State
Administrative Court against the Minister of Finance," he said.

Separately, the owner of Bank Jakarta, Probosutedjo, was also
fuming at the government's decision to liquidate his bank. He
said he would not sign the liquidation reports.

Probosutedjo, one of Soeharto's half brothers, said the
closure of 16 private banks over the weekend and the travel ban
imposed on the owners of the banks were serious violations of
human rights.

The government announced Saturday that 16 banks would be
liquidated following the International Monetary Fund's US$23
billion economic rescue package announcement.

Bank Indonesia Governor J. Soedrajad Djiwandono said during
the closure announcement that the financial conditions and
business development of the banks in question were unhealthy.

Speaking during a break of a People's Consultative Assembly
session here yesterday, Bambang said Bank Andromeda could be
rescued and the government should have let it recover.

"If Mar'ie is willing, we can save the bank," Bambang
claimed.

Andromeda spokesman Pieter Gontha claimed Sunday that the bank
had proposed to Bank Indonesia a last minute plan to inject Rp
350 billion ($100 million) into the bank, but the proposal was
rejected.

Speaking at his business headquarters yesterday, Probosutedjo
said Bank Indonesia had made mistakes in its audit of Bank
Jakarta which he claimed was very sound and healthy in terms of
cash flow.

He said that as of last August, Bank Jakarta was considered
healthy with a ratio of capital to assets of 9.45 percent, higher
than the 8 percent required by the government.

He admitted that his bank had some bad debts but argued that
this was caused by small businesses failing to repay debts.

"The small entrepreneurs, mostly indigenous people, were not
able to compete with capital-intensive entrepreneurs,"
Probosutedjo, owner of the Mercu Buana Group, said.

Probosutedjo was also fuming at reports that owners of the
bank were banned from traveling abroad.

"This is truly an insult, as if the owners of the liquidated
banks had committed subversive crimes," he said.

Immigration authorities officially banned yesterday 60
directors and owners of closed banks from traveling abroad.

A government regulation on bank liquidation, issued Dec. 23,
stipulates that members of boards of commissioners and directors
may not quit their positions without the central bank's consent.

They are required to stand ready to provide information to a
liquidation team, appointed by Bank Indonesia.

The regulation also rules that whenever a bank is liquidated,
depositors will be paid after the liquidation team pays all
salaries owed, court fees, auction fees, taxes and administrative
costs.

Both Bambang and Probosutedjo assured depositors that they
would not lose their money.

Probosutedjo said that the Mercu Buana Group managed Le
Meridien Hotel in Jakarta, valued at Rp 350 billion, a number of
property projects, valued at Rp 540 billion, a cocoa plantation
in North Sumatra, worth Rp 40 billion, and other projects.
(08/prb/icn/amd)b

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