Bank Jakarta's liquidation halted
Bank Jakarta's liquidation halted
JAKARTA (JP): The Jakarta State Administrative Court supported
yesterday the request of Bank Jakarta to remain open pending a
final court verdict in its battle against its closure by the
government.
"The ministerial decree and the central bank gubernatorial
decree have been postponed," presiding judge Lintong Oloan
Siahaan said in his ruling on the bank's case against the
government.
The court ordered the first defendant, Minister of Finance
Mar'ie Muhammad, to suspend his decree No.533/KMK.017/1997 on the
liquidation of the bank on Nov. 1.
The court also ordered the second defendant, Bank Indonesia
(the central bank) Governor Soedradjad Djiwandono, to postpone
his decree No.30/125/Kep./Dir on the appointment of Bank
Jakarta's caretaker for the liquidation of its assets.
The bank is owned by Probosutedjo, a half-brother of President
Soeharto, who not only strongly protested the bank's closure but
also kept it open in defiance of Mar'ie's ruling.
"This decision is based on Article 67, Clause 4, Point A of
Law No. 5/1986 on the State Administrative Court," Lintong told
reporters.
The clause stipulates that a government decree can be
postponed if it inflicts a great loss on the plaintiff.
"The plaintiff has mentioned a number of necessary conditions
which should be considered," Lintong said.
According to the plaintiff, he said, the bank liquidation last
month resulted not only in a loss of profit but also cost some
250 employees their jobs.
Moreover, Lintong said, the liquidation had threatened the
survival of companies that deposited their funds in the bank.
"So, the panel of judges considered the plaintiff's interests
to be more important as the defendants' lawyers have failed to
specify what it was they meant by (when they said the closure
was) in the public interest," Lintong said.
The government's lawyers did not say whether they would
appeal, but lawyer Luhut M.P. Pangaribuan said the team would
file a letter of objection to the court. He said the liquidation
had been conducted as part of the country's economic reform
needed to cope with the financial crisis.
One of the plaintiff's lawyers, Abdul Fickar Hadjar, said the
court's decision would now enable the bank to pay back its
depositors.
"It is also important that we can now collect the bank's
credit," Hadjar said.
Normal
Probosutedjo told journalists that following the court
decision the bank could operate normally, as before.
"But, we have not yet decided when we will operate normally
again," he said.
Probosutedjo said the bank would soon settle its obligations
to all its depositors.
"First of all, we will disburse our funds deposited in Bank
Indonesia, the central bank, totaling Rp 15 billion," he said.
This deposit is Bank Jakarta's reserves, to meet the central
bank's statutory reserves requirement of 5 percent of Bank
Jakarta's third-party funds.
Depositors
The funds would be used to pay the remaining depositors.
Depositors with savings of up to Rp 20 million have already
been paid by the government, through three state banks, using
bridging finances.
Probosutedjo said that Bank Jakarta had another Rp 12 billion
of funds borrowed by other banks through the inter-bank market.
"With this decision, we will demand all our funds from other
banks," he said without mentioning the banks.
Before the closure Bank Jakarta had total assets of some Rp
300 billion.
Probosutedjo was one of two bank owners who filed a suit
against the government over the closure of their banks.
Probosutedjo filed the lawsuit on Nov. 7.
Bambang Trihatmodjo, Soeharto's second son, withdrew his
lawsuit last month citing "the national interest" as the reason.
The closure of the 16 ailing banks was part of an economic
reform package demanded by the International Monetary Fund in
exchange for its US$23 billion bailout to help the troubled
Indonesian economy recover. (10/rid)