Bank Bali figure suspects UK bank

JAKARTA (JP): Rudy Ramli, former president of Bank Bali, suspected on Saturday that British Standard Chartered Bank might have been involved in stratagems to take over his bank.

Breaking his silence, Ramli said that on the eve of Bank Bali's takeover by the central bank on July 23 Standard Chartered and Bank Bali hosted a big reception at the Shangri-La Hotel celebrating their strategic alliance that was about to be concluded.

"But in the morning of July 23, we were summoned to Bank Indonesia to hear the devastating verdict that our bank was taken over due to our failure to put up our share of the recapitalization fund by the July 22 deadline," Ramli said.

Ramli, one of the main suspects in the US$80 million scandal at Bank Bali, cited many events prior to the takeover which caused him to suspect underhanded maneuverings either by executives of IBRA or by the British bank to acquire the bank.

However, a lot of his explanations, besides raising new issues as those regarding Standard Chartered's role and IBRA's integrity in asset management, left many holes in regards to his cession deal with politically well-connected businessman Djoko Chandra and ruling Golkar party's deputy treasurer Setya Novanto which led to the controversial transfer of huge fees.

Ramli, whose family was the founding shareholders of Bank Bali, often avoided questions by saying he could no longer remember many of the details which preceded the scandal.

"From the conclusion of our memorandum of understanding with Standard Chartered on April 22, 1999, regarding its planned acquisition of 20 percent of Bank Bali until the completion of its three-month due diligence on the bank, I was never told by the British bank that any big irregularities had taken place at Bank Bali," Ramli said.

Sadly, he added, IBRA had stopped talking to Bank Bali management since April and instead dealt only with Standard Chartered.

However, IBRA has revealed that Standard Chartered uncovered a sharp increase in Bank Bali's losses due to questionable transfers of Rp 546 billion out of the bank in early June.

According to IBRA, the British bank also discovered attempts by Bank Bali management to sell its good assets and found that new losses had catapulted the bank's recapitalization requirement from Rp 2.6 trillion, estimated as of March, 1999, to Rp 4.3 trillion.

The British bank threatened to pull out of the acquisition deal if the funds were not returned to Bank Bali, leaving IBRA (government) to bear the whole cost of recapitalization. This forced Bank Indonesia to take over the bank on July 23 and transfer it to IBRA, which on July 26 put the bank under the management of Standard Chartered through an investment deal.

Ramli disputed the government's estimate of Bank Bali's recapitalization needs, pointing out the widely-differing conclusions by independent auditing firm KPMG which audited the bank three times over the past year to June, 1999.

"KPMG's audit, made at the request of Bank Indonesia, put our recapitalization need as of December, 1998 at Rp 1.4 trillion, the lowest among private national banks. But another audit by the same auditors, made at the request of IBRA, raised the capital shortfall to Rp 2.6 trillion as of March, 1999. Then KPMG, this time assigned by Standard Chartered, put the capital shortage at Rp 4.3 trillion as of June, 1999," Ramli said.

"Despite losses from negative interest rate spreads and possibly a rise in the amount of bad loans, the estimated steep rise in the capital shortage within such a short time and under an improving economic condition seems questionable."

Neither Standard Chartered nor IBRA have ever told us why the capital gap had increased so sharply," Ramli said.

Desperate

On his controversial deal that triggered the scandal, Ramli said he entered into a cession deal in mid-January, 1999 with Djoko Chandra of PT Era Giat Prima to recoup his bank's claims on now defunct Bank BDNI out of desperation and total frustration.

He said he had tried to collect the interbank claims since March, 1998 but up to December his efforts met with total failure.

"To my recollection, I tried seven times to recoup the claims from the Indonesian Bank Restructuring Agency (IBRA). Each time was turned down because my credits were said to be ineligible to the government guarantee on bank deposits and claims," Ramli said.

Ailing Bank BDNI's management was taken over by IBRA in April, 1998 and was closed down four months later with all its assets and liabilities taken over by the agency.

"So when Djoko approached me in late October or early November, 1998 with an offer of help, I had actually considered my claims to be worthless. To me then, any cent recouped was an earning," he said.

Djoko seemed to drop the names of key officials at Bank Indonesia and IBRA and many other figures in the power center he claimed to know very well to convince Ramli of his power.

"I became more convinced about his powerful political connections after I found that Djoko knew, in full, details of Bank Bali's claims on Bank BDNI, Bank Tiara and Bank Umum Nasional. He must have possessed a great influence to gain access to such information," Ramli said.

"Djoko also knew immediately when Bank Indonesia had transferred Rp 904 billion to Bank Bali's account at the central bank," he added in referring to Djoko's powerful clout.

"You should put yourself in my shoes. When I was already desperate, when for me the worst had come, my bank finally recouped not only the principal but also the interest of its claims on Bank BDNI."

Later developments showed that Ramli transferred a total of Rp 546 billion in commissions to Djoko and Novanto.

Both IBRA and Bank Indonesia have insisted that Bank Bali should have used third-party services to collect its interbank claims as they were covered by the government guarantee scheme.

"Personally, I do not get a single cent of the reimbursement. All went to Bank Bali," he added.

But Ramli left unanswered a lot of questions as to why he did not cancel, but had instead extended, the cession deal after Djoko failed to hand over securities in April in return for the claims ceded to him by Bank Bali and why auditors failed to discover the deal.

"IBRA should have known it since I had reported the contract to Bank BDNI, Bank Tiara and Bank Umum Nasional which were all under IBRA's receivership," Ramli said. (vin)