BI to complete divestment program this year: Sjahril
BI to complete divestment program this year: Sjahril
JAKARTA (JP): Bank Indonesia Governor Sjahril Sabirin said on
Friday that the central bank would divest all of its ownership in
various financial institutions this year.
Sjahril said that the divestment of the Bank Indonesia
subsidiaries would be conducted either through the stock market
or a private placement to strategic investors.
"We're proceeding with the divestment program ... We'll adjust
our strides to the (new) central bank law," he said in response
to a question about the divestment plan.
Sjahril was speaking to reporters following Friday prayers at
the central bank headquarters.
He said that the central bank had no revenue target from the
divestment program because it would all depend on the market
condition.
He declined to provide the list of the Bank Indonesia
investment in financial institutions.
A source, however, said that the Bank Indonesia subsidiaries
included the Netherlands-based Bank Indover, credit insurance
firm PT Askrindo, investment bank and securities firm PT Bahana
Pembinaan Usaha Indonesia and PT Bina Usaha Indonesia, a
multifinance company catering to small and medium-sized
enterprises.
The source declined to provide financial data and the size of
Bank Indonesia ownership in the aforementioned companies, arguing
that the central bank was still in the process of negotiation
with various strategic investors.
But Sjahril said that the Bank Indonesia had only a minority
stake in the companies.
The International Monetary Fund had initially demanded Bank
Indonesia complete the divestment of its subsidiaries by the end
of last year.
Sjahril did not say what the reason for the delay was, but
Bank Indonesia had been engaged in a long dispute with the
government over the controversial government bank liquidity
support facility.
Also, the embattled central bank governor was kept in the
custody of the Attorney General's Office for five months last
year over alleged involvement in the high-profile Bank Bali
scandal.
The House of Representatives is currently in the process of
deliberating the amendment of the central bank law. This is
expected to be completed in the middle of this month.
Under the proposed amendment, Bank Indonesia must complete the
divestment program this year.
According to the existing central bank law, Bank Indonesia's
role is to design and implement monetary policy, maintain the
country's payment system and supervise the banking sector.
The law stipulates that Bank Indonesia can only have equity
participation in clearing agencies, rating agencies and bank
deposit guarantee agencies.
Approval from the legislature should first be sought for
investment in other institutions.
There has been allegations that Bank Indonesia investment in
various financial institutions in the past was based on
collusion, nepotism and corruption practices. (rei)