BCA sale to go on despite protest

BCA sale to go on despite protest

The Jakarta Post, Jakarta

In a show of force to oppose the sale of Bank Central Asia (BCA)
to foreign investors, thousands of employees of the country's
largest retail bank staged a mass protest in several major cities
on Monday.

But the government insisted that it would not back down from
the sale plan, with Vice President Hamzah Haz saying the
government was likely to announce the winning bidder of a 51
percent stake in the bank on Tuesday.

"The sale won't be canceled as it's part of the (country's)
letter of intent (to the International Monetary Fund) and the IMF
has approved it," he said following a Cabinet meeting.

The Indonesian Bank Restructuring Agency (IBRA) has
shortlisted two final bidders, including a consortium led by
U.K.-based Standard Chartered Bank Plc, and U.S. investment firm
Farallon Capital.

The sale of government shares in BCA has been delayed since
2000 due to various reasons, including political interference.

The completion of the divestment program is seen as a litmus
test by international lenders and investors for the government's
commitment to the economic reform program.

The support of international lenders, particularly from the
IMF, which is providing a multibillion dollar bailout loan for
the country, is crucial as the government is planning to meet the
Paris Club of creditor nations in April to seek a rescheduling
facility for debts maturing this year.

The rescheduling facility is important to help limit the 2002
state budget deficit to 2.5 percent of the gross domestic product
(GDP).

The sale of BCA will also provide cash to the government to
help finance the budget deficit, and is also part of efforts to
turn around the country's ailing banking sector.

But neither the IBRA top officials nor the State Minister of
State Enterprises Laksamana Sukardi, who has the final say on the
divestment program, could be reached for comment.

Meanwhile, Bank Indonesia Governor Sjahril Sabirin warned that
a delay in the sale of BCA would have a negative impact on the
overall economy.

He added that the sale process of the bank had been properly
implemented and the divestment program should in turn benefit
employees.

But spokesman for the BCA employees' union, Bilal Idris, said
that BCA employees here were firmly against the sale and demanded
that their representatives be included in all future negotiations
involving the fate of BCA.

"It is the employees who have worked to make BCA one of the
country's largest institutions. We should not be neglected,"
Bilal told the thousands of people, which largely consisted of
BCA employees, at the Wisma BCA compound in Jakarta.

At least 4,000 staff members from the Greater Jakarta area
joined the protest, causing at least 119 branches of BCA banks in
the area to shut down temporarily.

Demonstrators marched from the bank's headquarters to the
office of the Indonesian Bank Restructuring Agency (IBRA) and
then on to the House of Representatives (DPR) building in Central
Jakarta.

Many employees reportedly fear less generous benefits or even
job loss under a new owner.

In East Java, some 100 BCA employees protested outside the
East Java Council, demanding the government to cancel the sale of
the bank to "foreigners," stating that they believed they would
be treated unfairly by their new owners.

In West Java, the BCA employees' communication forum demanded
that West Java councillors support them in their protest against
the sale of the government's stake in the institution.

"We are fighting to make sure that the country's biggest asset
does not fall into the hands of foreigners," Agus Sudradjat, one
of the forum's seven representatives received by West Java
councillors, said on Monday.

In Medan, North Sumatra, 15 representatives of BCA employees
of the branch there met with North Sumatra councillors in
connection with the imminent sale.

Representatives' spokesman Dwi Mensana Tarigan said that all
BCA employees shared the fear that there could be a major
restructuring of the BCA organization nationwide, which would
most likely lead to "downsizing".

Through IBRA, the government took over BCA, which has 800
branches and 22,000 employees, from the Salim Group three years
ago at the height of the regional financial crisis. The
government injected huge amounts of bonds into the institution to
recapitalize the bank.