Bank Arta deal not yet approved by govt

Bank Arta deal not yet approved by govt

JAKARTA (JP): Minister of Finance Mar'ie Muhammad said
yesterday he had not approved the Artha Graha group's acquisition
of scandal-plagued Bank Arta Prima.

But Mar'ie said if Bank Indonesia, the central bank,
recommended the deal he would approve it.

"If Bank Indonesia has no problem (with the deal) and presents
its recommendation to the Ministry of Finance, it means all the
requirements have been met," Mar'ie was quoted by Antara as
saying yesterday.

But Mar'ie, who was attending a mosque opening ceremony at the
customs and excise duty directorate general's headquarters,
refused to say if he had had a recommendation letter from the
central bank on the acquisition.

"I don't know whether the letter has already been sent to the
Ministry of Finance or not. But I had not seen such a letter
before I left my office for this ceremony. Anyway, it's not a
minister's duty to check incoming mail," Mar'ie said.

Problem Bank Arta Prima was bought on May 17 by the widely
diversified Artha Graha group from PT Jagata Primabumi which
bought it from the Gunung Agung Group.

Artha Graha said the deal was approved by Bank Indonesia.

Reports say Artha Graha bought the bank through Bank Indonesia
which had taken it over from Jagata Primabumi because of a
promissory notes (promes) scam.

Artha Graha promised to inject fresh funds into Bank Arta
Prima but refused to take over the promissory notes worth Rp 324
billion (US$94.3 million at the current rate) although the notes
were all underwritten by Bank Arta Prima.

When buying Bank Arta Prima from Gunung Agung on July 27,
1995, PT Jagata agreed to take over Gunung Agung's debts to Bank
Arta Prima of Rp 187 billion and to other financial institutions
of Rp 174 billion.

But PT Jagata asked Gunung Agung to issue promissory notes
worth Rp 324 billion to settle the latter's debts.

The scam came to light when Jagata failed settle the promes as
it had agreed to do.

Six businessmen suspected of being involved in the scam were
arrested recently by national police. They include Made Oka
Masagung, a former Gunung Agung shareholder, and Kim Johanes
Mulia from PT Jagata. The other four are former directors or
commissioners of Bank Arta Prima.

Gunung Agung has demanded all charged against its executives
be dropped because the scam happened after it had handed over
Bank Arta Prima to PT Jagata.

But Jakarta Police Chief of Detectives Col. Gories Mere was
reported as saying yesterday that the police were still holding
Oka Masagung and Kim Johanes because there were strong
indications that they were involved in the scam. (rid)