Dragon still has chance to open branch office
Dragon still has chance to open branch office
JAKARTA (JP): Vanuatu-based Dragon Bank International still has the opportunity to open its representative office here despite the revocation of its investment permit by the Investment Coordinating Board (BKPM) last week.
The Ministry of Finance's Director General for Financial Institutions Bambang Subianto said here yesterday that Dragon Bank is still welcome to make a new application.
"Just do it according to existing procedures," he told newsmen following a hearing with Commission VII for finance and trade of the House of Representatives (DPR).
Asked if the revocation of its investment permit by BKPM would prevent Bank Dragon from receiving a license from the Ministry of Finance, Bambang said that would depend on the recommendation from Bank Indonesia, the central bank.
BKPM revoked the operational permit of Dragon Bank's representative office in Indonesia last week for operating in unlicensed activities.
The investment board did not specifically disclose the bank's representative error when announcing the revocation of the bank's investment permit. But sources said that Dragon Bank's representative had operated as a bank instead of an investment firm as stipulated in BKPM's license.
BKPM's chairman, Sanyoto Sastrowardoyo, later related the revocation of the license to the bank's alleged financial fraud.
Sanyoto was quoted by the Antara news agency as saying that the bank was reported to have been involved in financial fraud affecting three foreign banks -- Standard Chartered Bank, Dresdner Bank and an Italian bank.
In addition, he said, Dragon Bank had openly violated the investment permit given by his office, which allowed the bank's representative office here to act only as a supervising and monitoring body of the bank's investment activities in Indonesia.
Bambang said yesterday that operational licenses for representative offices of foreign banks should be issued by the Ministry of Finance, which, according to the existing laws, is the only ministry in charge of supervising and controlling all financial activities.
His office and the investment board had a different perception about the nature of Dragon Bank's operational activities.
"There was a different view between the Ministry of Finance and BKPM. Forgive us for the lack of coordination," Bambang said.
An executive of Dragon Bank said last week that the bank's executives "warmly welcomed" BKPM's decision.
Yee Mei Mei, an executive of the bank's Indonesian representative, is now engaged in a legal dispute with the branch office of the Standard Chartered Bank.
Yee, a Hong Kong national filed a lawsuit against the Standard Chartered Bank for allegedly blocking her accounts of around Rp 1 billion (US$45 million) without justification.
Sources said that the account was blocked owing to the allegation that Dragon Bank was involved in financial fraud. The executive of the Vanuatu-based bank, however, has repeatedly denied the allegation, saying that the bank's presence here was only to monitor its investments in telecommunication projects. (hen)