BNI shares plunge amid scam reports

BNI shares plunge amid scam reports

The Jakarta Post, Jakarta

Shares in state-owned Bank Negara Indonesia (BNI) tumbled by
19.2 percent or Rp 25 to Rp 105 each on Monday following press
reports of a huge lending scam in the publicly listed bank,
dealers said.

Dealers said that investors unloaded shares amid an overall
weak market sentiment as they feared the bank would suffer
serious losses from the scam.

The case has also raised concerns among investors of weak
supervision in the country's banking system and the endemic
corruption in the industry, a key factor behind the near collapse
of many banks during the late 1990s crisis.

Clear details of the case and actual losses to the bank have
yet to be disclosed to the public. Bank BNI management is
expected to brief the media about the case sometime this week.
But according to previous press reports, the case centered around
the issuance of bogus letter of credits (L/Cs) worth Rp 1.7
trillion (about US$200 million).

Police have so far arrested two senior BNI officers and
imposed a travel ban on six others including the end-users of the
L/Cs.

The two detained officers were BNI's head of foreign services
Edy Santoso and manager of BNI Kebayoran Baru branch
Koesadiyuwono.

The police were also questioning a number of witnesses.

BNI board of directors has so far denied any responsibility
for the scam. They claimed they never acknowledged the
disbursement of the export credit facility.

Meanwhile, many other shares also ended lower on Monday on
profit-taking in most blue chips spurred by Wall Street's losses
on Friday, dealers said.

The Jakarta Stock Exchange Composite Index fell 0.9 percent,
or 5.515 points, at 629.052, after falling to an intraday low of
624.781. But volume was robust at 738.5 million shares valued at
Rp 3.68 trillion.

Automotive company PT Astra International topped the slide by
falling 4.3 percent or Rp 200, at Rp 4,475. It was followed by
telecommunications operator PT Indosat which dropped 2.7 percent,
or Rp 300, to Rp 11,000.

Indosat's competitor PT Telkom was unchanged at Rp 6,050.

Cigarette maker PT Gudang Garam was down 0.4 percent, or Rp
50, at Rp 12,850, while its rival PT HM Sampoerna was unchanged
at Rp 4,375.

Shares of cement makers rose on the back of a recovery in the
property sector which is expected to profit the cement industry.

PT Semen Gresik, the largest cement maker, rose 3 percent or
Rp 250 to Rp 8,500 while PT Indocement was up 2.7 percent or Rp
50 at Rp 1,925.