BNI reshuffles its management
BNI reshuffles its management
JAKARTA (JP): Publicly listed state Bank Negara Indonesia
(BNI) reshuffled its management on Monday, appointing a new
president and chief commissioner, paving the way for its costly
recapitalization.
The bank's shareholders ousted Widigdo Sukarman as BNI
president at an extraordinary shareholders meeting, replacing him
with the bank's planning director Saifuddien Hasan.
The shareholders also removed four other directors as well as
two commissioners, including chief commissioner Arie Soelendro.
The bank appointed Zaki Baridwan, an assistant to the rector of
Gadjah Mada University, as chief commissioner.
Replacing BNI's management is a condition for its
recapitalization in the government's agreement with the
International Monetary Fund (IMF).
Newly appointed BNI president Saifuddien said the
recapitalization cost of BNI was expected to rise to about Rp 60
trillion (US$8.3 billion) from the original projection of Rp 52.8
trillion.
"I hope the recapitalization of BNI can be conducted soon
because the later the recapitalization is materialized, the
larger the recapitalization cost will be," Saifuddien said.
Under its agreement with the IMF, the government will release
the first tranche of its recapitalization bonds by March 31.
The bonds, however, will be released only after the new
management signs performance contracts with the government,
expected by Feb. 29, after which Germany's Commerzbank AG will be
brought in as an adviser to help implement the bank's business
plan.
Commerzbank AG will work with BNI to improve governance, risk
management and assess nonperforming loans.
Wolfgang Rohde from the German bank has joined the Indonesian
bank's board of commissioners.
The issuance of the remaining tranche of recapitalization
bonds will follow the completion of the 1999 year-end financial
audit, and implementation of the bank's business plan, expected
by June 30.
The recapitalization of BNI, as well as other state banks, has
been delayed by the emergence of the high-profile Bank Bali
scandal and more recently the Texmaco case.
BNI has especially been faulted for extending a huge Rp 9.6
trillion in loans to one business group, textile conglomerate
Texmaco Group.
Following the emergence of the Texmaco case, the government --
as the bank's majority shareholder -- called Monday's
extraordinary shareholders meeting to unseat Widigdo and his
management team.
In addition to Saifuddien, BNI's shareholders also retained
Binsar Pangaribuan on the bank's board of directors. Other
directors are all new faces, but all from within the bank. They
are Mohammad Arsjad, former head of the bank's strategic planning
division; Eko Budiwiyono, former head of the treasury division;
Agoest Subhektie, head of the internal supervision division;
Rachmat Wiriaatmadja, former head of the international division;
and Suryo Sutanto, former head of the technology information
division.
Market watchers said it was unclear as to whether appointing a
new president and other directors from within the bank would meet
the requirements of strengthening the management, as required by
the IMF.
Equity banking analyst Lin Che Wei from Socgen-Crosby
Indonesia said that ideally, the shareholders appoint an outsider
to lead BNI so that he or she would not face any psychological
barrier to root out corrupt practices within the bank, especially
following the emergence of the Texmaco case.
Nevertheless, he said, the reshuffle would at least give
impetus to the increasing transparency at the bank. He expects
the market will be neutral to the management change.
"Pak Saifuddien must prove to the market that he is a reformer
and is willing to take drastic moves to clean up the bank," he
said.
BNI's stock price closed unchanged on Monday at Rp 300 a
share. (03/rid)