Bank Jakarta defies govt's closure order

JAKARTA (JP): Probosutedjo, half-brother of President Soeharto and owner of Bank Jakarta, kept his bank open yesterday, ignoring the government's closure order.

The bank said yesterday it had begun to repay customers up to Rp 2 million from ordinary savings accounts and up to Rp 5 million from checking accounts.

Some depositors at the bank said they received part of their money, though the amount was not as much as expected, on the second floor of the Tedja Buana building on Jl. Menteng Raya.

Probosutedjo, also Bank Jakarta's chief commissioner, said his bank had to stay open to reimburse part of its customers' money despite the central bank's closure order to protect the interests of cash-strapped depositors.

"This is to support our depositors. Most of them are small- scale entrepreneurs who need cash. I've repaid them with my own money because Bank Jakarta's accounts are still frozen by Bank Indonesia (the central bank)." he said.

The government ordered the closure of 16 ailing banks Saturday as part of financial reforms supported by the US$23 billion in standby loans from the International Monetary Fund and several other multilateral institutions.

But Probosutedjo, until yesterday, refused to sign the liquidation documents submitted by the central bank's caretaker team.

The government has set aside Rp 2.3 trillion as an advance reimbursement to depositors of the 16 liquidated banks, with a maximum reimbursement of Rp 20 million per depositor.

The reimbursement will be made by three designated state banks -- Bank Dagang Negara, Bank Rakyat Indonesia and Bank Negara Indonesia -- starting Nov. 13.

Depositors who have more than Rp 20 million at the liquidated banks will receive the remainder of their funds after the liquidation team sells the assets of the banks.

Probosutedjo acknowledged that he deliberately defied the government's closure order to show his objection to the liquidation measure.

He contended that his bank was not bankrupt and did not deserve to be closed.

He also contended that his bank had not violated any rules, adding that its capital adequacy ratio was 9.45 percent (higher than the minimum required by the central bank), but he did not elaborate on the quality of his assets.

When asked about the legal lending limit and connected loans, Probosutedjo was quoted by Antara as saying that "all banks practiced that and it did not matter as long as the public's interest was unaffected."

Probosutedjo, chairman of the diversified Mercu Buana Group, boasted that Bank Jakarta was backed up by assets amounting to trillions of rupiah.

He cited several of his personal assets, including Hotel Le Meridien in Jakarta worth Rp 350 billion, 900 hectares of land in Hambalang near Bogor worth Rp 540 billion, 1,200 hectares of cacao estates in North Sumatra worth Rp 40 billion, 800 hectares of rubber plantations worth Rp 30 billion, General Motors Buana Indonesia worth Rp 50 billion, five hectares of land in Jakarta worth Rp 100 billion and a $200 million equity stake in the Kedaung glassware plant.

Probosutedjo demanded that the government cancel the closure and liquidation of his bank. "I also ask all depositors to stay calm. I guarantee that Bank Jakarta will keep their money safe."

He stressed that he would take the government to court if his bank was not officially reopened.

"This is for the public's interest," he said.

Before the closure, he said, he had tried several times to meet with the monetary authorities, but they were unavailable.

A shareholder of Bank Andromeda, Bambang Trihatmodjo -- President Soeharto's second son -- said he would also bring the case to the State Administrative Court against the minister of finance, who he accused of unilaterally closing his bank. (icn/vin)