BDN, Eksim pulled out of GKG project in time

BDN, Eksim pulled out of GKG project in time

JAKARTA (JP): Bank Dagang Negara (BDN) and Bank Ekspor Impor
Indonesia (Eksim) pulled out of a syndicated loan for businessman
Eddy Tansil as soon they discovered that something was wrong with
the credit arrangement.

Executives of the two state banks said in a court testimony
yesterday that they withdrew from the syndication early this
year, leaving Bank Pembangunan Indonesia (Bapindo) as the lead
manager of the syndication to carry the loan by itself.

Rushandoko of BDN and Darwanto of Bank Eksim were testifying
yesterday at the trial of former Bapindo director Towil Heryoto,
who stands accused, along with three other former directors, of
allowing their bank to lose nearly Rp 1 billion (($476 million)
in its dealings with Tansil, the owner of the Golden Key Group.

Both Rushandoko and Darwanto said that Bapindo's decision to
convert the terms of the loans for Tansil from issuance letter of
credit to red clause was in violation of the syndication
agreement.

The two banks withdrew from the syndication early this year
before the credit turned sour.

"We withdrew withdrawn our participation in financing the
petrochemical project of PT Graha Swakarsa Prima (GSP) and PT
Pusaka Warna, the Polypropylene Unit (PP), last March,"
Rushandoko told the court.

Bapindo never informed his bank about the conversion in the
terms of the loan, a practice which most bankers said carries a
high risk for the lender.

"The syndication agreement states that a bank member can pull
out of the syndication if it is not satisfied with Bapindo's
performance," he said.

Rushandoko acknowledged that his bank had agreed to join in
the syndication because the loan applications were submitted with
a letter of reference from Sudomo, then the coordinating minister
of political affairs and security.

BDN participated in financing a third of the total $125.5
million fund required for the GSP project and $109.9 billion for
the PE project. Bapindo and Bank BNI, also a state bank, each
took a third of the share of the two syndications.

Bank Eksim was committed to financing 25 percent of the $241.2
million needed to finance the petrochemical project of PT Pusaka
Warna, the Polyethylene Unit (PE). Bapindo took a 50 percent
share, while Bank BNI took the other 25 percent.

Towil's trial at the South Jakarta district court was
adjourned until today.

Tansil has already been convicted of the Rp 1.3 million ($620
million) loan fraud at Bapindo. He was sentenced to 17 years
imprisonment and ordered to pay Rp 500 billion ($238 million) in
restitution. (02)