Bank Danamon bankruptcy petition 'not valid'
Bank Danamon bankruptcy petition 'not valid'
JAKARTA (JP): Bank Indonesia Governor Sjahril Sabirin said on
Friday that the bankruptcy petition filed by Bank IFI against the
publicly-listed Bank Danamon at the Jakarta Commercial Court was
not valid.
Sjahril said that according to the existing law, only the
central bank had the right to file bankruptcy petitions against
banks.
"According to the law, a bankruptcy petition against a bank
can only be made by Bank Indonesia," Sjahril told reporters at
Bank Indonesia headquarters.
He added that Bank Indonesia would not file a bankruptcy
petition against Danamon because such a move could have a
detrimental impact on the overall domestic banking environment.
"There are a lot of depositors' money in the bank. If a bank
as large as Danamon is put into bankruptcy, there will be
national scale consequences," Sjahril said.
Bank IFI filed a bankruptcy petition on Wednesday against
Danamon at the Jakarta Commercial Court on grounds that the
latter declined to pay some US$12 million in debt.
The move by Bank IFI prompted the Jakarta Stock Exchange on
Wednesday to suspend transactions in the shares of Bank Danamon,
but the suspension was lifted the following day after learning
that the bankruptcy petition was not valid.
The debt to Bank IFI was originally created by Bank Nusa
Nasional, which was acquired by Bank Danamon last year together
with seven other banks as part of the government bank
restructuring program.
The principal amount of the debt is around $4.6 million, but
combined with interest rates, Bank IFI said that the debt totaled
$12 million.
Danamon disputed the total debt figure claimed by Bank IFI.
"The figure of the interest is much bigger than the figure of the
principal," said Danamon lawyer Amir Syamsudin.
Amir said that his client had tried to seek an out of court
settlement via several rounds of negotiations facilitated by Bank
Indonesia. He said Danamon was ready to pay the $4.6 million in
debt principal plus around $1.4 million "placement," but the
offer was rejected by Bank IFI.
Amir warned that Danamon would fight back if the actions taken
by Bank IFI caused damage to its reputation.
Interest rate
Elsewhere, Sjahril dismissed reports suggesting that several
domestic banks had been badly affected by the central bank's high
interest rate policy.
"Please let me know if there are banks which have been badly
affected (by the interest rate policy). I don't think there are
any," Sjahril said.
The benchmark interest rate of one-month Bank Indonesia SBI
promissory notes increased again to 16.26 percent on Wednesday.
The central bank has allowed the interest rate to continue to
move upward in a bid to help curb inflation and defend the ailing
rupiah.
Several banks have reportedly started to suffer financial
bleeding again due to negative spread.
Negative spread occurred mainly because the rising SBI rate
put upward pressure on the time deposit rate. On the other hand
the banks could not readily lend money at a higher rate because
of the high risk associated with the business activities.
Some bankers complained earlier that the rising SBI rate could
cause their banks to suffer negative spread, which could lead to
further deterioration in their capital adequacy ratio.
Sjahril declined to speculate whether the SBI rate would
continue to increase from the current level.
"It will depend on the economy. If it improves, interest rates
(may go down)," he said.
The government had earlier called on the independent central
bank to lower the interest rate, but Bank Indonesia insisted that
it would stick to its biased tight monetary policy until
inflationary pressure subsided.
Bank Indonesia pointed out that year-on-year inflation rate
during the past several months had reached around 10 percent
level.(rei)