Fed fines Indonesians

Fed fines Indonesians

WASHINGTON (Bloomberg): The U.S. Federal Reserve said on
Friday it had fined an Indonesian investor and a Jakarta-based
company US$450,000 and ordered them to sell their interest in the
parent company of the Bank of San Francisco.

The Fed charged that Putra Masagung and PT Gunung Agung of
Jakarta violated the U.S. Bank Holding Company Act as a result of
the company's 1997 purchase of the San Francisco Co., parent of
the Bank of San Francisco.

On Aug. 7, 1997, the San Francisco Co. said Masagung, who
owned 97.8 percent of the company's outstanding Class A common
stock, announced that his stake had been acquired by PT Gunung
Agung. At the time, neither the Fed nor state regulators had
approved of the acquisition by PT Gunung Agung but the
investors were discussing the purchase with regulators.

Masagung and the company agreed to the Fed's order without
admitting or denying wrongdoing.

The Bank Holding Company Act governs ownership of U.S.
banks, and investors must obtain prior clearance from the Fed
before taking a significant in a U.S. bank.

The Fed issued a cease and desist order that requires Masagung
and PT Gunung Agung to sell their interests in The San Francisco
Co. through a voting trust. It orders Masagung to pay a civil
penalty of $250,000 and PT Gunung Agung to pay $200,000.

Such a penalty is a significant amount for the Fed to levy in
a Bank Holding Company Act violation.