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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