Bank staff protest, owners mull suit

Bank staff protest, owners mull suit

JAKARTA (JP): Scattered protests by bank employees greeted the
weekend closure of 38 private banks here on Monday as owners of
the closed banks mulled whether to sue the government over the
move.

The Jakarta Stock Exchange (JSX) suspended trading on the
closed banks, while the Federation of Domestic Private Banks
demanded the government take concrete measures to reactivate the
real sector to expedite economic recovery.

Hundreds of employees of at least five of the closed banks --
Bank Papan Sejahtera, Bank Central Dagang (BCD), Bank Mashill
Utama, Bank Putra Surya Perkasa and Bank Bahari -- picketed their
respective offices, demanding fair severance pay.

About 150 employees of BCD packed the bank's lobby on Jl.
Sudirman, South Jakarta, while right behind the BCD building some
100 Bank Mashill employees protested their office.

"We are demanding the bank's owners pay us severance pay at
least two times government regulations," said a spokesman for the
BCD employees.

According to government regulations, a worker who has been
with a company for less than five years is entitled to severance
pay equal to one-month's salary. The maximum severance pay is for
employees who have been with a company for over 35 years. These
employees are entitled to severance pay equal to 11-months
salary.

Ibnu Sina, 27, an employee at Bank Mashill who organized the
protest, said the employees waited to meet with the bank's owners
but they did not show up.

"We will continue to protest until the owners meet our
demands," he said, adding that the employees were demanding
severance pay four times government regulations.

Placards covered the Mashill building's ground floor where the
protest took place. One of placards read: "We are ready to become
People's Security (Kamra) to chase out the (bank's) owners."

Bank Putra Surya Perkasa was also hit by a protest, with some
250 employees gathering in the bank's lobby at the Sumitmas II
building on Jl. Sudirman. They also demanded fair severance pay.

Benny M. Suwarya, the bank's legal officer who coordinated the
protest, said the employees would continue to protest until they
received the money.

The National Labor Party said in a statement that it would
file a class action suit against the government for the banking
crisis, which resulted in the massive lay offs.

The party's chairman, Tohap Simanungkalit, said the banking
crisis resulted from the central bank's failure to monitor
domestic banks.

"The National Labor Party will file a class action suit at a
(district) court against the government, in this case the
President and the monetary authorities, because they have to be
held responsible for the bank liquidations which inflict losses
to employees of the liquidated banks and the people in general."

Meanwhile, some 25 owners of the closed banks are likely to
sue the government over the move, said Sukamdani Sahid
Gitosardjono, the owner of the closed Bank Sahid Gajah Perkasa.

Sukamdani told the afternoon daily Suara Pembaruan the central
bank and the government were using double standards to decide
which banks to close, compelling the owners to take legal action
against the government.

He cited the ongoing economic crisis as the main reason the
banks were in the red.

The closures would devastate the economy and were detrimental
to the bank employees. Around 17,000 workers in the banking
sector will lose their jobs as a result of the decision, he said.

The government on Saturday closed 38 private banks,
nationalized seven other banks and will recapitalize nine private
banks.

Of the 38 closed banks, seven are listed on the JSX. They are
Bank Papan, Bank Umum Servitia, Bank Mashil, Bank Arya Panduarta,
Bank Bahari, Bank Bira and Bank Ficorinvest.

The JSX suspended trading on the closed banks. The next move
is to delist the banks as it did with four banks closed by the
government last year.

The exchange also said that it temporarily suspended trading
on the nationalized listed banks -- Bank Duta, Bank Tamara and
Bank Rama.

Meanwhile, Antara reported that depositors rushed Bank Bali
and Bank Lippo's branches in Semarang, Central Java, fearing that
the banks eventually would be closed down if they could not raise
the money for recapitalization.

Minister of Finance Bambang Subianto again reassured the
public the government guaranteed all deposits in domestic banks.

At a session with the House of Representatives Commission VIII
for finance and the state budget, Bambang said that the bank
restructuring program was a necessary step toward the country's
economic recovery.

"If the program is well implemented, God willing, it will help
accelerate the process of economic recovery." (01/rei/rid)