Banks may buy into Kanindotex

Banks may buy into Kanindotex

JAKARTA (JP): Bank Indonesia Governor J. Soedradjad Djiwandono said on Saturday that the plan of Bank Bumi Daya (BBD) and Bank Pembangunan Indonesia (Bapindo) to acquire stakes in the heavily indebted Kanindotex Group faces no legal constraints.

He said that the two banks could acquire stakes in the Kanindotex Group, provided that their equity participation was only temporary.

Soedradjad said that, while the Banking Act prohibits banks from owning shares in companies, "it is not against the law if the equity participation occurs within the framework of (the banks') rescuing their loans," he said.

The Kanindotex Group, which operates three textile companies in Central Java, has bad debts of about Rp 932.94 billion (US$432.55 million) with BBD and Bapindo, making the two banks the de facto owners of the group.

The question whether banks are allowed to own a stake in the group became a subject of debate after a delay in the signing of an agreement on the takeover of the textile group by a consortium led by businessman Bambang Trihatmodjo.

The signing of the takeover agreement, which was scheduled to take place on March 31, was delayed at the last minute, reportedly because of Minister of Finance Mar'ie Muhammad's dissatisfaction over the contents of the contract.

The minister is said to have demanded that the consortium reserve about 20 percent of the Kanindotex Group's shares for the two banks and a further 20 percent for GKBI, the group's present caretaker.

Benefit

Sources said that the minister considered the planned takeover deal, which would allow the consortium to settle the Kanindotex Group's problem loans within nine years at interest rates of between four and eight percent per annum, to be unfair, giving too much benefit to the consortium. The consortium includes Bambang Yoga Soegama, son of a former chief of the national intelligence agency, and Johannes Kotjo, a former executive of the Salim Group.

The consortium's controversial takeover plan was also opposed by the Indonesian Chamber of Commerce and Industry (Kadin) and the economic affairs board of the ruling political group, Golongan Karya (Golkar).

Kadin and Golkar's economic affairs board recently asked the government to give priority, in seeking a solution to the textile group's debt problems, to GKBI, which is formally still owned by the former convict Robby Tjahyadi.

Late last year, Bambang Trihatmodjo, who chairs the widely diversified Bimantara Group, and Johannes Kotjo jointly acquired a majority stake in Mayatexdian, a listed affiliate of the Kanindotex Group.

Business analysts described the move by Bambang's consortium to take over the Kanindotex Group as a mere trick by which Robby Tjahyadi was seeking to regain control of the group.

Rizal Ramli, the managing director of the Econit business consulting firm, predicted that the Kanindotex Group would be incorporated into Mayatexdian if the consortium was allowed to take over the company.

"Merging the Kanindotex Group into the publicly-listed Mayatexdian is another form of back door listing," Ramli said. (hen)