Closed Bank Pacific forms team to settle its debts

JAKARTA (JP): Shareholders of Bank Pacific, one of the 16 private banks closed by the government early this month, have formed a special team to speed up the process of settling its debts to both individuals and institutions.

The head of the liquidation team, Mohammad Ma'ruf Saleh, said Saturday the five-member team, which consists of shareholders and central bank officials, would begin the process today, and it expected to complete certain tasks within a year.

"We are targeting -- but not making a promise -- to complete the disbursement of funds, deposits and savings within one year," Ma'ruf, who represented the central bank in the team, said after the bank's shareholder meeting.

Ma'ruf said the team also expected to pay the bank's 872 employees the full amount of their severance pay within two months, after the team sold some of its assets, he said.

It would also pay its employees their November wages and at least a three month severance pay by the end of this month, he said.

Holders of the accounts of up to Rp 20 million in the bank have received their money through state-owned banks.

The central bank, Bank Indonesia, is the majority shareholder of Bank Pacific, owning a 51 percent stake, while Ibnu Sutowo, the former president of the state-owned oil firm Pertamina, holds the rest.

Ma'ruf said Bank Pacific's total assets reached around Rp 1.2 trillion (US$338.02 million), and its third-party funds around Rp 500 billion.

According to the October edition of Infobank monthly, the bank's assets as of June 1995 reached Rp 2.27 trillion, while its credits reached Rp 1.36 trillion and public funds Rp 1.16 trillion.

Ma'ruf said the bank would first try to sell its assets in the form of performing loans, totaling around Rp 310 billion.

It would then sell its fixed assets, such as properties, he said. Properties accounted for a large part of the bank's assets, he said, adding it was among the hardest to sell.

Ma'ruf said some banks had offered to partially take over the banks, such as some of its branches, but the partial acquisition would complicate the liquidation process.

"We are looking for a bank with large capital to take over our assets," he said.

Ma'ruf said some of the employees might be referred to companies belonging to the bank's shareholders, including chief commissioner Pontjo Sutowo.

Pontjo, the son of Ibnu Sutowo, controls PT Indobuilco, which owns the Hilton hotels in Jakarta, Surabaya (East Java) and Bali.

Pontjo said Saturday the bank would concentrate on following the law and regulations during the liquidation process.

"We are going to abide by the rules during this process, the social aspects of the liquidation would be our second consideration," he said in answering questions about the welfare of the bank's employees.

"Employees are not the only people who have rights here, so do our creditors, so we have to see who we are giving precedence to," he added.

Meanwhile, the spokesperson of the 16 banks' liquidation process, Budi Rochadi, said yesterday members of the Association of Private National Banks had no commitment to give employment priorities for staff of the closed banks.

"The banks have not committed to employ workers of the closed banks. There might be deals made between banks, but they would be conducted in a private capacity," he said.

Bank Pacific owns 20 offices, 11 of which are located in Jakarta.

The bank had had a history of trouble. It was reportedly on the brink of collapse in late 1995 due to bad loans estimated at Rp 2.1 trillion.

Most of the bad debts were incurred by PT Pacific International Finance, owned by Endang Utari Mokodompit, Ibnu's daughter who formerly headed the bank.

Early this year, several private banks, including Bank Danamon and the Bakrie Group's Bank Nusa International, were planning to buy the bank. (das)