Ex-Bank Bali owner demands compensation

Ex-Bank Bali owner demands compensation

JAKARTA (JP): Former owner and CEO of the publicly listed Bank
Bali, Rudy Ramli, demanded the government pay some Rp 9 billion
(US$1 million) in compensation, and to "freeze" the rights of
Deutsche Bourse Clearing (DBC) in the bank.

Rudy said on Wednesday that if the demands were fulfilled, he
would drop his lawsuit against the Indonesian Bank Restructuring
Agency (IBRA) and Bank Indonesia over their decision to
nationalize his bank last year.

"I only demand to be compensated for the losses I suffered in
the past," he told a press conference.

He said that Rp 7 billion would be used to pay his lawyer,
while the remaining 2 billion would be compensation for having to
retire early as president of Bank Bali.

The government is seeking an out of court settlement over its
legal dispute with Rudy to allow the recapitalization of Bank
Bali to proceed.

The House of Representatives has demanded the government not
recapitalize Bank Bali unless its former owner drops the suit.

IBRA, a unit of the finance ministry, is expected to submit
to the Financial Sector Policy Committee (FSPC) later this week
its recommendation on whether to recapitalize or liquidate Bank
Bali.

The government nationalized Bank Bali last year after its
owner failed to come up with the necessary 20 percent financing
requirement to recapitalize the bank.

Under the country's bank recapitalization program, the
government would help finance up to 80 percent of the cost by
injecting bonds.

But Rudy filed suit against the nationalization of his bank,
and surprisingly, the Jakarta Administrative Court ruled in favor
of Rudy. Both Bank Indonesia and IBRA have appealed.

The government planned to recapitalize Bank Bali last month at
a cost of Rp 4.9 trillion, but was delayed due to the ongoing
legal dispute.

The government has said that each month of delay will inflate
the recapitalization cost by Rp 40 billion.

IBRA is now expecting either to recapitalize the bank in
September or liquidate it.

But the dilemma for the government is that by liquidating Bank
Bali the government has to come up with around Rp 6 trillion in
cash, not bonds, to guarantee depositors money and to pay
compensation for the employees.

IBRA declined to comment on Rudy's demands. An agency official
said that the matter was now the affair of the FSPC.

Rudy also demanded the government or the country's capital
market supervisory agency (Bapepam) "freeze" the rights to sell
and to buy, and the vote of DBC, a German-based investment firm,
in Bank Bali.

The ownership of DBC in Bank Bali became a controversy last
year following the outbreak of the high profile Bank Bali scandal
in July.

DBC had quietly amassed more than 48 percent of Bank Bali,
making it a potential majority owner of the bank with the rights
to install its own people in key management positions.

The government owns more than 50 percent of Bank Bali, while
the remaining 1 percent is divided between the public and the
Ramli family.

The investors behind DBC remain unidentified until now. Even
Bapepam has so far failed to demand DBC disclose its investors
despite strong public pressure.

There have been suspicions that the Ramli family is behind
DBC. But Rudy has repeatedly denied this.

His demand to freeze DBC seems to be an effort to uncover who
has been investing in Bank Bali via DBC.(rei)