Andromeda's last effort fails to avoid liquidation axe

JAKARTA (JP): Bank Andromeda, one of 16 banks closed by the government over the weekend, said yesterday it tried to save the bank at the last minute with Rp 350 billion (US$100 million) in new funds, but the effort fell short of the deadline.

Pieter Gontha, one of Andromeda's shareholders, said at a news conference the bank had put up the funds to Bank Indonesia (the central bank) Saturday morning to prevent the bank from being liquidated, but the decision had already been made.

"By the time we arrived at Bank Indonesia at 9:45 a.m., the central bank governor and the finance minister had already made the decision, although it was not announced until 1 p.m. that day," added Gontha, who represented Andromeda's board of commissioners.

"This is ironic since Andromeda's shareholders all tried their best to solve and fulfill the requirement to save the bank. We were in a hurry to deliver Rp 350 billion to save the bank, but we were too late," he said.

The government announced Saturday it had closed 16 ailing private banks as part of an International Monetary Fund-assisted reform package to restore confidence in the country's economy.

Gontha said the central bank notified Andromeda's management Thursday about the Saturday meeting at Bank Indonesia's head office. But the letter from the central bank only said the meeting was to discuss matters about Andromeda.

"We will announce the implementation of Andromeda's liquidation process on Nov. 13, after further discussion with a 'caretaker' team from Bank Indonesia," he said.

Gontha admitted Andromeda had violated several banking regulations, such as exceeding the legal lending limit.

He said Bank Andromeda had violated the legal lending limit by providing loans totaling $75 million to some of its shareholders who later used the loans to put up equity in PT Chandra Asri petrochemical company.

Several Andromeda shareholders are also main shareholders in PT Chandra Asri.

"However, we (the shareholders) have repaid the loans to Bank Andromeda," Gontha added.

The bank also failed to meet the minimum reserve requirement several times, although it had always paid the fine imposed by the central bank for violating the rule, he said.

"But Bank Andromeda had fulfilled the minimum 8 percent capital adequacy ratio (against assets)," Gontha pointed out.

Andromeda is 50 percent owned by Prayogo Pangestu of Barito Pacific, 25 percent by Henry Pribadi, chairman of the Napan Group, and the remaining 25 percent by President Soeharto's third son Bambang Trihatmodjo.

Gontha said Chandra Asri and other companies owned by Andromeda's shareholders were the biggest depositors at Andromeda.

Andromeda, established here in 1990, has about 9,000 customers and 20,000 accounts in 13 branches across Java.

The bank's president, Nico Mailangkai, said the bank's assets totaled about Rp 1.2 trillion.

The bank had Rp 860 billion in third-party deposits, and its total credit reached almost Rp 900 billion, Nico said.

Nico said Andromeda's debts through the interbank market were between Rp 30 billion and Rp 40 billion. (das)