BCA saga set for next stage
Berni K. Moestafa, The Jakarta Post, Jakarta
The drawn-out controversy surrounding the sale of Bank Central Asia (BCA) appears to be nearing its climax, as bidders place their final bids today. Not so, according to analysts.
They said the formal bidding process would end, but its controversy was far from over. It might linger even after a winner had been announced.
Bank Indonesia's announcement last Friday that bidders had until today to complete all documentation for their fit and proper test showed that preparations for the sale was still underway.
"The fit and proper test should have been completed long before the deadline of the final bid," banking analyst at Bank Negara Indonesia (BNI) Ryan Kiryanto told The Jakarta Post over the weekend.
The Indonesian Bank Restructuring Agency (IBRA), could not name a winner until after Bank Indonesia had finalized its tests on the bidders, he said.
IBRA is reportedly expecting to name the winner two weeks after the submission of the final bids today.
But as the final bids started to come in today, there was no saying when the fit and proper tests would be completed.
The longer the wait, the greater the risk of collusion to leak the final bids and influence Bank Indonesia's judgment, some analysts said.
Ryan said this situation inevitably placed Bank Indonesia in a more strategic position than IBRA, the seller of BCA.
IBRA, which had defined the bidding criteria for BCA, should have the final say, he said.
"I am afraid IBRA can easily shift the blame to Bank Indonesia should problems emerge later with the new owner of BCA," he said.
Suspicion has been high that some of the bidders for BCA are just a front for its former owner, the Salim Group, to regain control.
Salim is banned from buying back BCA after the group, through the bank, misused some US$5 billion in state funds, which it has not yet repaid.
For the mismanagement of BCA, the Salim family has been prohibited by Bank Indonesia from buying a bank or setting up a new one.
Bank Indonesia's fit and proper test aims, among other things, to identify bidders' funding sources.
The tests have come amid public suspicion that the majority of the bidders were vulnerable to Salim infiltration.
Most came as consortiums of local bidders, whose source of funds were none too clear.
Among the more credible bidders are UK-based Standard Chartered Bank Plc., and the U.S. investment firm Newbridge Capital and Farallon.
The government has shown a strong leaning toward Standard Chartered, emphasizing it wanted a strategic investor for BCA.
But Standard Chartered was still looking for a bidding partner three weeks before Monday's deadline.
It subsequently remained silent on whether it had found that partner.
IBRA plans to sell a 51 percent stake in BCA to help reduce the state budget deficit.
Its attempt to sell a stake in BCA to a strategic investor began in late 2000 with three delays, mainly due to too much politicking.
Now the Business Competition Supervisory Commission (KPPU) is keeping an eye on the sale process.
Commenting on the apparent last hurdle in the bidding process, KPPU member Pande Radja Silalahi said the commission would stay active in ensuring the process continued properly.
The commission has already expressed concern over IBRA's inability to produce bidding criteria that would best ensure "clean" funding sources.
Pande also questioned the delayed fit and proper test, which, he said, might extend the sale process by as long as 30 days.
"The ideal amount of time required by Bank Indonesia to carefully examine the bidders would be about 30 days," Pande said.