Bank Bali confident of funds return

Bank Bali confident of funds return

JAKARTA (JP): Head of Bank Bali's new management team, Douglas
Beckett, said on Wednesday that a little more than half of the Rp
546 billion (US$74 million) funds missing from the bank were
returned as of Wednesday.

He said that some Rp 287 billion was placed in an escrow
account with Bank Bali and of that total Rp 112 billion was
transferred through Bank BNI on Monday and another Rp 175 billion
through Bank Lippo on Tuesday.

"But we're confident that all the money will be returned this
week," Beckett said at a media conference.

Beckett is a banker assigned by U.K.-based Standard Chartered
Bank to lead the new management team of Bank Bali since July 26.
The British bank was given management control by IBRA as part of
an agreement to purchase a 20 percent stake in Bank Bali.

Standard Chartered found out on July 20 that some Rp 546
billion was missing from Bank Bali through questionable transfers
which were later linked with a trading and investment company
headed by the vice treasurer of the ruling Golkar Party.

Banking law expert Pradjoto revealed the controversial
transaction to the media late last month, saying that the money
was used as a commission for PT Era Giat Prima (EGP) for its
service to help the bank recoup some Rp 904 billion in interbank
claims on closed-down Bank BDNI which were guaranteed by the
Indonesian Bank Restructuring Agency (IBRA).

EGP is a company owned by businessmen Djoko Chandra and Setya
Novanto, who are linked to the ruling Golkar Party, raising
speculation that part of the money was used to secure election of
President B.J. Habibie in November.

Former Bank Bali president Rudy Ramli, IBRA deputy chairman
Pande Lubis and several high-ranking government officials close
to President B.J. Habibie were implicated in the scandal.

Head of the Supreme Advisory Council (DPA), A.A. Baramuli, who
was also believed to be involved in the scandal, said last week
that Setya would return the missing funds in full on Monday.

But Bank Indonesia Governor Sjahril Sabirin said on Tuesday
that only some of the money was returned. He said the rest would
be returned on Wednesday.

The pledge to return the missing funds does not, however,
assuage the public's demand for a thorough investigation and to
take the "real" culprits to court.

When asked to comment on this, Sjahril said on Wednesday that
the main concern of the country's banking authority was how to
collect the missing funds.

Sjahril said that the central bank and the Ministry of Finance
would ask for the advice of the Attorney General concerning the
possibility of taking legal action against those involved in the
irregular deal.

In a related development, the National Police summoned Rudy
Ramli for questioning on Wednesday.

Rudy and four other Bank Bali senior executives have been
named as suspects by the police in addition to EGP's Setya and
Djoko.

Police spokesman Togar Sianipar said that Djoko would be
summoned on Friday.

But sources said that the police found difficulties in
summoning Setya because he was also a member of the People's
Consultative Assembly.

IBRA deputy chairman Farid Harianto said on Monday that Rudy
was also "indicated" to have quietly sold some $130 million of
Bank Bali's loan portfolio assets which might increase the
recapitalization cost of the bank.

Farid said that Standard Chartered informed the agency about
the indication on July 20.

In its letter to IBRA, a copy of which was obtained by the
Jakarta Post, Standard Chartered informed the agency of
questionable transactions at Bank Bali, in addition to the
missing funds of Rp 546 billion.

"We are aware that late last week, Bank Bali, through Price
Waterhouse Cooper, has attempted to sell a package of loans in
Singapore. A significant number of loans listed for sale were
classified as category 5 (bad loans). The total size of the
package of outstanding principal and accrued interest is $132
million," the letter dated July 20 said.

Category 5 loans are nonperforming loans (NPLs) which should
be transferred to IBRA. Whatever IBRA can eventually recover from
the bad loans would be used to help finance the government's
contribution to recapitalize the bank.

Farid said that an audit process was still underway to verify
the asset sale indication.

Meanwhile, Beckett also said on Wednesday that Standard
Chartered would not withdraw its plans to enter Bank Bali despite
the scandal.

IBRA chairman Glenn S. Yusuf said the government would not
cover the missing funds.

He said that if the money was not fully returned, Bank Bali
might have to operate with a capital adequacy ratio (CAR) of less
than the required 4 percent level.

Separately, chairman of the Indonesian Capital Market
Supervisory Agency (Bapepam), Jusuf Anwar, said on Wednesday that
the agency formed a special team to investigate possible insider
trading in the shares of publicly listed Bank Bali prior to the
nationalization of the bank on July 23. (rei/prb/emf/ylt/udi)