Bapindo asked to delay merger

JAKARTA (JP): The South Jakarta District Court ruled on Thursday state Bank Pembangunan Indonesia (Bapindo) delay plans to merge with state Bank Mandiri pending a firm legal decision on a dispute with private-owned Bank IFI, or until its obligation to the bank was settled.

Bank IFI president Harry Rachmadi said at a media conference the dispute with Bapindo started when the latter ordered the former in 1994 to provide some US$9 million in loans to textilemakers PT Vastex Prima Industry and PT Senang Karisma Tekstil, and PT Jawa Muna Agrobusiness.

He said Bapindo owned a 60 percent stake in Bank IFI at the time, but now it only had slightly more than 1 percent.

It turned out the loans given to the three firms were used to repay nonperforming loans at Bapindo, Harry said.

He added Bapindo violated the legal lending limit ruling by forcing Bank IFI to provide $9 million in loans or Rp 18 billion at an exchange rate of Rp 2,000 to a U.S. dollar at the time, while the bank's capital was only Rp 20 billion.

Bapindo and three other state banks, including Bank Bumi Daya, Bank Dagang Nasional and Bank Ekspor Impor Indonesia, are supposed to complete a legal merger process with Bank Mandiri on Saturday.

Harry said at an exchange rate of Rp 8,000 to the dollar, Bapindo owed Bank IFI some Rp 162.5 billion. (rei)