Court rules IBRA's takeover of bank Bali illegal
Court rules IBRA's takeover of bank Bali illegal
JAKARTA (JP): The Jakarta State Administrative Court ruled on
Thursday that the takeover of Bank Bali by the Indonesian Banking
Restructuring Agency (IBRA) last July was illegal and the bank
should be returned to its former controlling owner, Rudy Ramli.
The court ruled that the central bank, Bank Indonesia (BI),
must revoke its decree that placed Bank Bali under IBRA
management and return the bank and its management to the status
before it was issued.
Rudy filed a lawsuit against the government last October
accusing BI and IBRA of having taken over Bank Bali illegally and
without protecting the bank's best interests.
"The most important thing is that justice has now been
achieved," said Rudy, formerly Bank Bali president and member of
the bank's founding Ramli family, following the court's ruling.
IBRA took over Bank Bali last July after the bank failed to
meet the requirement of raising 20 percent of its
recapitalization costs.
The government's recapitalization program aims at bringing
banks' capital adequacy ratio (CAR) -- a bank's asset to credit
ratio -- to a minimum of 4 percent.
The government puts up to 80 percent of the recapitalization
funds needed, while bank owners are required to inject the
remaining 20 percent.
Upon learning of the verdict, central bank governor Sjahril
Sabirin and IBRA chairman Cacuk Sudarijanto said they would file
an appeal.
Sjahril asserted that the government move to take over Bank
Bali was valid.
"The take over was legal. Therefore BI and IBRA will file an
appeal shortly," Sjahril told reporters.
BI later told a media conference that during the period
pending the appeal IBRA would still manage Bank Bali.
IBRA deputy Gerry Ng further assured the public that their
deposits in the bank would remain safe under the government's
guarantee blanket program.
However, Gerry conceded that the court ruling would
automatically cancel an extraordinary Bank Bali shareholders
meeting scheduled for Friday (today) to approve a rights issue
plan, which the bank requires for its recapitalization.
This cancellation will sabotage the last-minute scramble by
the government to meet the deadline for bank restructuring --
one of the requirements to qualify for another disbursement of
loans from the International Monetary Fund bailout fund.
Latest reports from the Jakarta Stock Exchange show that as of
this month Bank Bali is 49.18 percent owned by Germany's Deutsche
Boerse Clearing AG, 5 percent by Rudy's PT Sarijaya Wirasentosa,
8.3 percent by Japan's Sanwa Bank Ltd. and 27.24 percent by the
investing public.
The central bank defended its position on the takeover, saying
it had granted Bank Bali four months, instead of the normal one,
to come up with the 20 percent in recapitalization funds.
The central bank further argued that it was Bank Bali that
brought in Standard Chartered as its partner in raising 20
percent of the recapitalization costs, a move that required the
deadline for its recapitalization to be extended by three months.
Bank Bali's deal with Standard Chartered Bank ended in tatters
in early July after the UK bank discovered during a due diligence
that Bank Bali had made a questionable payment of Rp 546 billion
to third parties -- what later became known as the politically
charged Bank Bali scandal.
However, Rudy argued in his lawsuit that the government had
forced Bank Bali to accept Standard Chartered as its strategic
partner.
He also said the bank was never included in the process of
Standard Chartered's entrance, and further accused the government
of conspiracy with the foreign bank to help it acquire a 20
percent stake of Bank Bali at a cheap price.
The court's ruling marked another legal blow for IBRA in cases
involving Bank Bali.
Last December, a Jakarta court rejected a criminal suit filed
by the government against Rudy and other former Bank Bali
directors for their alleged involvement in the scandal.
Early this month, the South Jakarta District Court dropped all
charges against Djoko Tjandra, the key suspect in the Bank Bali
scandal, on technical grounds. (bkm/09)
JAKARTA (JP): The Jakarta State Administrative Court ruled on
Thursday that the takeover of Bank Bali by the Indonesian Banking
Restructuring Agency (IBRA) last July was illegal and the bank
should be returned to its former controlling owner, Rudy Ramli.
The court ruled that the central bank, Bank Indonesia (BI),
must revoke its decree that placed Bank Bali under IBRA
management and return the bank and its management to the status
before it was issued.
Rudy filed a lawsuit against the government last October
accusing BI and IBRA of having taken over Bank Bali illegally and
without protecting the bank's best interests.
"The most important thing is that justice has now been
achieved," said Rudy, formerly Bank Bali president and member of
the bank's founding Ramli family, following the court's ruling.
IBRA took over Bank Bali last July after the bank failed to
meet the requirement of raising 20 percent of its
recapitalization costs.
The government's recapitalization program aims at bringing
banks' capital adequacy ratio (CAR) -- a bank's asset to credit
ratio -- to a minimum of 4 percent.
The government puts up to 80 percent of the recapitalization
funds needed, while bank owners are required to inject the
remaining 20 percent.
Upon learning of the verdict, central bank governor Sjahril
Sabirin and IBRA chairman Cacuk Sudarijanto said they would file
an appeal.
Sjahril asserted that the government move to take over Bank
Bali was valid.
"The take over was legal. Therefore BI and IBRA will file an
appeal shortly," Sjahril told reporters.
BI later told a media conference that during the period
pending the appeal IBRA would still manage Bank Bali.
IBRA deputy Gerry Ng further assured the public that their
deposits in the bank would remain safe under the government's
guarantee blanket program.
However, Gerry conceded that the court ruling would
automatically cancel an extraordinary Bank Bali shareholders
meeting scheduled for Friday (today) to approve a rights issue
plan, which the bank requires for its recapitalization.
This cancellation will sabotage the last-minute scramble by
the government to meet the deadline for bank restructuring --
one of the requirements to qualify for another disbursement of
loans from the International Monetary Fund bailout fund.
Latest reports from the Jakarta Stock Exchange show that as of
this month Bank Bali is 49.18 percent owned by Germany's Deutsche
Boerse Clearing AG, 5 percent by Rudy's PT Sarijaya Wirasentosa,
8.3 percent by Japan's Sanwa Bank Ltd. and 27.24 percent by the
investing public.
The central bank defended its position on the takeover, saying
it had granted Bank Bali four months, instead of the normal one,
to come up with the 20 percent in recapitalization funds.
The central bank further argued that it was Bank Bali that
brought in Standard Chartered as its partner in raising 20
percent of the recapitalization costs, a move that required the
deadline for its recapitalization to be extended by three months.
Bank Bali's deal with Standard Chartered Bank ended in tatters
in early July after the UK bank discovered during a due diligence
that Bank Bali had made a questionable payment of Rp 546 billion
to third parties -- what later became known as the politically
charged Bank Bali scandal.
However, Rudy argued in his lawsuit that the government had
forced Bank Bali to accept Standard Chartered as its strategic
partner.
He also said the bank was never included in the process of
Standard Chartered's entrance, and further accused the government
of conspiracy with the foreign bank to help it acquire a 20
percent stake of Bank Bali at a cheap price.
The court's ruling marked another legal blow for IBRA in cases
involving Bank Bali.
Last December, a Jakarta court rejected a criminal suit filed
by the government against Rudy and other former Bank Bali
directors for their alleged involvement in the scandal.
Early this month, the South Jakarta District Court dropped all
charges against Djoko Tjandra, the key suspect in the Bank Bali
scandal, on technical grounds. (bkm/09)