Bank Jakarta drops liquidation lawsuit

JAKARTA (JP): A lawsuit challenging the closure of Bank Jakarta, a private bank chaired by President Soeharto's half- brother, has been withdrawn Antara reported yesterday.

Lawyers for Bank Jakarta withdrew the suit challenging the closure, which was ordered by the government last November, during a hearing at the State Administrative Court presided over by Judge Lintang Oloan Siahaan, the news agency said.

Probosutedjo, Soeharto's half-brother, was also a major shareholder in the bank.

The suit was brought against former Bank Indonesia governor Soedradjad Djiwandono and former finance minister Mar'ie Muhammad.

Soedradjad was replaced in February and Mar'ie was not reappointed to the new cabinet named by President Soeharto.

Judge Siahaan expressed relief at the outcome and recommended both parties settle the matter out of court, Mugiono, the court registrar said.

Mugiono said despite the withdrawal, the central bank and the finance minister would still have to respond to the case at a hearing next Wednesday.

Antara quoted a Bank Indonesia lawyer, Achmad Kartohadiprodjo, as saying that despite the suit being withdrawn, a number of issues still required clarified by the central bank.

The government liquidated 16 insolvent private banks, including Bank Jakarta, in November last year as the first moves in a sweeping program of reforms agreed with the International Monetary Fund (IMF) in exchange for a US$43 billion rescue package.

Probosutedjo launched a scathing public attack on Mar'ie after his bank was closed, calling on the minister to resign over his failure to manage the economy.

Bank Jakarta and Bank Andromeda, also owned by a Soeharto relative, challenged the move in the administrative court.

Bank Andromeda, controlled by Soeharto's son Bambang Trihatmodjo, withdrew its suit last November, days after lodging it, saying it had done so in the "national interest". (swe)