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)