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)