Bank Duta to sell subsidiary

Bank Duta to sell subsidiary

JAKARTA (JP): The shareholders of publicly-listed Bank Duta have endorsed the management's proposal to sell subsidiary PT Graha Sarana Duta for the price of Rp 30 billion (US$13.06 million) to Koperasi Mitra Duta, a cooperative belonging to the bank's employees.

Speaking after an extraordinary shareholders meeting here on Tuesday, Bank Duta president Muchtar Mandala said the management had decided to sell the subsidiary to comply with Decree No. 2597/Kep/Dir/1992 of Bank Indonesia, the central bank, which prohibits a bank from conducting business in non-financial sectors.

Graha Sarana Duta, which is 100-percent owned by Bank Duta, is involved in a property development and management business.

Muchtar said that, since the transaction did not involve a conflict of interest, the decision did not require the approval of independent shareholders. Such approval is required by the capital market regulations in circumstances of a conflict of interest.

Muchtar said that neither Bank Duta's controlling shareholders nor its management has shares in Koperasi Mitra Duta, nor are they involved in the cooperative's management.

He added that the total proceeds of the transaction, representing 11.4 percent of Bank Duta's total revenues in 1994, will be used to strengthen Bank Duta's financial position.

He said that Graha Sarana posted losses of Rp 399 million in 1993 and Rp 688 million in 1994. However, during the first six months of this year, it booked a net profit of Rp 4.55 billion. Its total assets decreased from Rp 25.58 billion as of the end of 1994 to Rp 20.76 billion as of June. (08)