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)