Bank Artha Graha will fix troubled Bank Arta Prima

Bank Artha Graha will fix troubled Bank Arta Prima

JAKARTA (JP): Bank Artha Graha, a banking unit of the well-
diversified Artha Graha Group, confirmed yesterday it had bought
scandal-plagued Bank Arta Prima and vowed to turn it into a sound
bank.

The company said it signed an acquisition deal with the bank's
previous shareholders on May 17, this year.

Bank Indonesia has given it the purchase the green light. But
it still needs approval from the Minister of Finance.

Chairman of the Artha Graha Group, Tommy Winata, said Bank
Arta Prima had a strong management and customer base.

"Based on that, we are ready to inject fresh funds to totally
support Bank Arta Prima's operation," Tommy Winata said.

Bank Arta Prima was previously owned by PT Jagata Primabumi
which bought the bank on July 27, 1995 from PT Gunung Agung and
Group.

According to Gunung Agung, Jagata did not pay it a cent but
agreed instead to take over its debts of Rp 187 billion to Bank
Arta Prima and Rp 174 billion to other financial institutions.

Jagata asked Gunung Agung to issue promissory notes (promes)
worth Rp 174 billion to settle the latter's debts to various
financial institutions and other promes worth Rp 150 billion. All
promes were underwritten by Bank Arta Prima.

Jagata promised to settle the promes but defaulted.

Kim Johanes also misused some of the promes, Gunung Agung
said.

The promes scam resulted in the arrest of Kim Johanes and five
men from Gunung Agung, including its former chairman and
shareholder, Oka Masagung and former directors and commissioners
of Bank Arta Prima.

Gunung Agung says charges against its people should be dropped
as the offenses happened after it had transferred Bank Arta Prima
to Jagata.

Jagata was set up by Kim Johanes Mulia, Jeffie Geovanie and
Hedijanto, an executive at the President Soeharto-chaired
Dharmais foundation who was acting in his personal capacity.

Bank Indonesia's Governor J. Soedradjad Djiwandono said there
was no connection between the Bank Arta Prima promissory notes
scam and the Dharmais foundation.

"President Soeharto wants the Bank Arta Prima case cleared up
quickly," Soedradjad was quoted by Bisnis Indonesia as saying.

After it was bought by the Artha Graha group, Bank Arta Prima
entered the inter-bank call money market after being absent for
some time, Tommy said.

The Artha Graha group has experience in salvaging ailing
banks, it salvaged Bank Propelat which is now running with Rp 130
billion capital and total assets of Rp 1.4 trillion.

"We have a loyal and experienced team, and Bank Artha Graha is
ready to provide technical assistance to Bank Arta Prima to
improve its performance," Tommy said.

Artha Graha has a wide range of business interests, ranging
from property, telecommunications, finance, manufacturing,
trading, fishery and mining. One of its units is publicly listed
PT Jakarta International Hotels and Development. (rid)