Bank Jakarta drops liquidation lawsuit

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brother, has been withdrawn Antara reported yesterday.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as saying that despite the suit being withdrawn, a number of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)