Bapepam rejects Bank Bali's rights issue plan

JAKARTA (JP): The Capital Market Supervisory Agency (Bapepam) refused on Thursday to approve Bank Bali's controverisal rights issue plan due to inadequate information disclosure.

Freddy R. Saragih, the head of Bapepam's Corporate Financial Analysis Bureau, said the management of Bank Bali failed to meet the disclosure requirement to carry out its limited public offering proposal.

"We cannot approve Bank Bali's rights issue plan because the information disclosures on general, accounting and legal aspects are not adequately met," Freddy said following a meeting with the Bank Bali management.

Freddy said Bapepam, among others, required a written statement regarding the status of a group of investors in Germany who were reported to control about 40 percent of the bank's share.

"We want to know about the status of the investors, and whether they want to propose a person to sit on the management. This information is important to the public," he said.

Freddy also said Bapepam was not yet satisfied with the Indonesian Bank Restructuring Agency's (IBRA) explanation over the termination of the management and investment agreements between the agency and the Standard Chartered Bank (SCB).

IBRA took over Bank Bali in the middle of this year after its founder failed to provide 20 percent of the bank's recapitalization costs as required under the government-sponsored bank recapitalization program. The agency then named SCB to manage the bank and allowed it to initially buy a 20 percent stake in Bank Bali after the rights issue. SCB was also entitled to further increase its shareholding in Bank Bali by buying up the remaining shares from the government within five years.

SCB later cancelled the investment agreement due to pressure from Bank Bali's employees.

Freddy acknowledged these were only examples of reasons why Bapepam did not approve Bank Bali rights issue proposal.

Bank Bali planned to conduct a 99-for-1 rights issue early this year with the exercise price of Rp 60.68 a piece on the Rp 5 nominal value to raise funds for its recapitalization.

The rights issue was previously expected to receive approval from the bank's extraordinary shareholders meeting which had been scheduled for Dec. 31, but it was subject to Bapepam's approval. As much as Rp 4.036 trillion would be raised through the rights issue.

Bank Bali's current rights issue plan was based on the audited June 30 financial statement, which is valid only until the end of this year.

The bank, according to the existing regulations, would have to use the September financial statement due to the delay; thus, it needed at least another three months to complete the audit of the bank's financial statement. (udi)