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)