Bank Jakarta has 'bad ties' with Bank Indonesia

Bank Jakarta has 'bad ties' with Bank Indonesia

JAKARTA (JP): President Soeharto's half brother Probosutedjo
has implied that a poor relationship between his closed bank,
Bank Jakarta, and Bank Indonesia, the central bank, triggered the
government's recent decision to close his bank.

Probosutedjo said yesterday none of Bank Jakarta's directors
had ever built a good relationship with Bank Indonesia's
executives, and this might have caused the shocking move to force
his bank into liquidation.

"Maybe because our directors or board of commissioners never
paid a visit (to the central bank) and would not make friends
with its executives. We... failed in the criteria of healthy
banks," he said.

He was referring to the prevailing business practice of giving
gifts to government officials as part of lobbying.

"With our meager profits, we could not afford to give gifts to
Bank Indonesia officials like other private banks," he said,
adding that those banks had received trillions of rupiah in funds
from the central bank.

Bank Jakarta is among 16 banks closed by the government two
weeks ago as part of an economic reform package.

Probosutedjo filed a lawsuit last Saturday, demanding the
bank's reinstatement.

"The government said we were unhealthy, but the sickness was
merely a harmless cold, we should not have been put away," he
said.

He said during the currency crisis in July, Bank Jakarta
managed to remain liquid, although many banks lost in clearing
settlements, he said. These banks borrowed money from Bank
Jakarta, but they were not closed by the government, he said.

Probosutedjo said his bank did not have loans from the central
bank or other commercial banks.

He urged the government to allow the bank to disburse the
customers' funds without having to wait for state banks to do so.

The central bank appointed state-banks Bank Dagang Negara,
Bank Negara Indonesia and Bank Rakyat Indonesia to reimburse
depositors their savings worth less than Rp 20 million starting
tomorrow.

Before Probosutedjo's legal action, President Soeharto's
second son Bambang Trihatmodjo, an owner of closed Bank
Andromeda, lodged a similar lawsuit against Minister of Finance
Mar'ie Muhammad and Bank Indonesia Governor J. Soedradjad
Djiwandono.

Antara reported yesterday that Mar'ie and Soedradjad had asked
the Attorney General's Office to represent them in the lawsuit
filed by Bank Andromeda at the Jakarta State Administrative
Court.

The letter giving the office the power of attorney was
received by Attorney General Singgih on Monday, Deputy Attorney
General for Civil and State Administration Cases Martin Basiang
said.

Singgih has appointed a team, made up of Vence Lumempouw, Putu
Sutedja, Irdhan Dachlan and Masri Djinin, to represent the
government in court, which is scheduled to hold the first hearing
of the case today.

Martin said he hoped the matter would be resolved quickly by
the court, if not through an out-of-court settlement beforehand.
"I think everyone wants a win-win solution," he said.

"We should hear the good news in the next few days," he said.

The appointed attorneys will be working with five lawyers who
have already been appointed by Soedradjad to handle the lawsuit,
Martin said. (das)