BI avoids firm stance on Bambang's acquisition of Bank Alfa

BI avoids firm stance on Bambang's acquisition of Bank Alfa

JAKARTA (JP): Bank Indonesia, the central bank, attempted to
respond to questions from members of the House of Representatives
yesterday about the allegedly controversial acquisition of Bank
Alfa's license by President Soeharto's son Bambang Trihatmodjo.

Bank Indonesia Governor J. Soedradjad Djiwandono said at an
extended working session with the House of Representatives'
Commission VIII for state budget and finance that the central
bank would not bar anybody who is not blacklisted from acquiring
banks.

"To be an owner of a bank, someone must not be among those
included in the black list of persons being banned from joining
bank management and ownership," Soedradjad told the commission.

But he did not explicitly state whether Bambang was included
in the central bank's black list or not.

Initially, the session was scheduled to finish Monday. But
because 25 of the commission's members raised more than 110
questions during the session, the commission and the central bank
agreed to extend the session to yesterday.

Soedradjad responded yesterday to a barrage of questions from
a number of legislators about the legality of Bambang -- who had
a 25 percent stake in Bank Andromeda which is one of the 16
government-closed banks -- acquiring a new bank.

Indonesia liquidated 16 insolvent banks in line with an
International Monetary Fund-led reform package to improve the
health of the financial sector.

Bambang, chairman of the Bimantara Group, initially challenged
the government's decision to close his bank through the Jakarta
Administrative Court. But he later dropped his suit saying that
it was "for the sake of national interests".

Informed sources said Bambang has acquired the license of Bank
Alfa, whose assets and liabilities had earlier been taken over by
Bank Risjad Salim International of the giant Salim Group.

Bank Alfa, according to the sources, would acquire the assets
and liabilities of the closed Bank Andromeda.

The session's chairman, Indra Bambang Utoyo, yesterday prodded
Soedradjad to answer candidly and in a straightforward manner the
legislators' questions on Bank Alfa in order to improve the
climate of transparency.

But Soedradjad did not answer directly and only indicated that
the central bank would not bar Bambang from acquiring Bank Alfa.

"And for commissioners or owners of the closed banks, if they
are not found guilty of or responsible for making their banks
insolvent, there are no reasons to put them on the black list,"
Soedradjad said during yesterday's session.

Soedradjad did not mention Alfa or Bambang in his statement.
Nor did he explain whether the shareholders were responsible for
the insolvency which led to the closure of Bank Andromeda.

Heru Soepraptomo, a director at Bank Indonesia, said the
central bank would allow Bank Alfa's plan to acquire the assets
and liabilities of Bank Andromeda as long as it did not violate
existing laws.

"As long as it is in line with the process of liquidation
(stipulated in Government Regulation No. 68/1996) it is all
right," Heru told journalists after the session.

Heru also maintained the central bank's position in
recommending to the finance minister to revoke the license of
Bank Jakarta, controlled by Soeharto's half brother Probosutedjo.

"We have established that Bank Jakarta was insolvent by the
time it was closed," Heru said.

Probosutedjo had filed a lawsuit against the finance minister
and the governor of Bank Indonesia, demanding them to reinstate
the license of Bank Jakarta.

He said later he would drop his lawsuit only if the central
bank declared that Bank Jakarta was sound when its license was
revoked on Nov. 1.

He also demanded that the finance minister and the central
bank governor allow him to fully reimburse all Bank Jakarta
account holders.

Heru said the central bank welcomed Probosutedjo's offer to
reimburse Bank Jakarta account holders provided that it was
pursued through proper procedures, namely through the caretakers
appointed by the central bank. (rid)