Bank Jakarta asks for adjournment, seeks settlement

Bank Jakarta asks for adjournment, seeks settlement

JAKARTA (JP): The Jakarta State Administrative Court postponed
the trial of Bank Jakarta's suit against Bank Indonesia
yesterday, as the privately owned bank said it would try to seek
an out of court settlement over its closure.

Bank Jakarta lawyers made the request to the court just as it
was about to begin testimony from Bank Indonesia, the central
bank, which would have exposed Bank Jakarta's financial state.

But lawyers from Bank Jakarta maintained that the request for
an adjournment was based on a desire to seek an amicable solution
to the issue.

"We still believe that an out of court settlement is the best
solution," lawyer Mohammad Yusuf told the court.

He claimed there were new developments in which the
government, through the central bank, seemed to agree and be more
accommodating to several conditions submitted by Bank Jakarta
earlier.

The seesawing legal battle in the Bank Jakarta case has seen
the court swing to both opposites of the pendulum.

Bank Jakarta was one of the 16 insolvent banks closed by the
government in November following the announcement of a financial
bailout package from the International Monetary Fund.

But it soon filed a suit at the Jakarta State Administrative
Court against the decision. It also appealed to remain in
operation while the case was being heard.

The Jakarta State Administrative Court issued a by-verdict
last week allowing Bank Jakarta to reopen while the case was
being tried, but the high court then issued the letter ordering
it to "disregard" the by-verdict.

Chief of the Jakarta Administrative Court, Lintong Oloan
Siahaan, maintained yesterday that the by-verdict remains valid
as there is not a single word in the high court's letter which
indicates the nullification of the by-verdict.

Moreover, he said, the court's ruling can not be annulled by a
mere administrative letter.

The conditions Bank Jakarta set for an out of court settlement
ranged from government acknowledgement that Bank Jakarta was a
sound bank, to a permit from both the central bank and the
Ministry of Finance allowing Bank Jakarta to fully reimburse
themselves of its account holders.

Lawyers representing Bank Indonesia and the Ministry of
Finance said Bank Jakarta would be allowed to reimburse its
account holders with its own funds.

Lawyer Achmad S. Kartohadiprodjo told The Jakarta Post the
bank would also be given the authority to collect money from its
debtors.

But Achmad's colleague, Luhut M.P Pangaribuan, said the
government would not revoke its decision to liquidate the bank
despite the Jakarta State Administrative Court's by-verdict last
week allowing the closed bank to reopen.

Bank Jakarta is still waiting on whether it will be granted
the operational license it requested following the by-verdict
issued by the Jakarta State Administrative Court.

Probosutedjo, President Soeharto's half-brother and major
shareholder of Bank Jakarta, has been fuming since the closure of
his bank, questioning the reasons why his bank was
liquidated.

The court was adjourned yesterday till Jan. 15, after which
lawyers from the two parties must reconvene if they fail to reach
an out of court settlement. (10)