Felia installed as new IBRA deputy chairwoman

JAKARTA (JP): Minister of Finance Prijadi Praptosuhardjo installed on Tuesday Felia Salim as the new deputy chairwoman of the Indonesian Bank Restructuring Agency (IBRA) in charge of the restructuring and sale of banks controlled by the agency.

Felia replaces Jerry Ng, who tendered his resignation earlier this year.

Felia was previously the executive secretary of the powerful Financial Sector Policy Committee (FSPC), which groups several senior economics ministers and has the right of final approval on major bank and corporate restructuring deals made by IBRA.

Felia, who graduated from a university in Canada and has lived overseas for many years, is also a former director of the Jakarta Stock Exchange.

One of IBRA's major programs this year is to complete the sale of the government's majority shares in publicly listed Bank Central Asia (BCA) and Bank Niaga, which were nationalized in 1999.

The House of Representatives recently approved the sale of the government's majority shares in these banks. The plan calls for the government to sell up to 40 percent of its equity in BCA and 51 percent in Bank Niaga.

The divestment program was to have been completed late last year, but was delayed due to poor market conditions. The delay disappointed the International Monetary Fund and was one of the main reasons for the delay in the disbursement of the Fund's next loan tranche to the country.

Felia also will be responsible for monitoring the performances of the 11 banks under IBRA's control that are expected to play major roles in the country's revamped banking industry.

The government plans to restructure the banking industry by merging banks to form a few "core banks". It hopes to realize this plan by 2003.

The government has injected bonds valued at hundreds of trillions of rupiah to recapitalize the banks controlled by IBRA. But high domestic interest rates and the plunging rupiah have made the banks vulnerable to further financial bleeding.

There have been rumors that the resignation of Jerry, who took up his post with IBRA in February last year, was the result of political intervention by FSPC, which is led by Coordinating Minister for the Economy Rizal Ramli.

IBRA deputy chairman Mahmuddin Jassin tendered his resignation at the same time as Jerry, but the finance minister insisted he remain in his post. Mahmuddin is an official at the Ministry of Finance.

Both Jerry and Rizal have denied these rumors. Jerry said he left IBRA because he wanted to return to the private sector after completing the major tasks of restructuring the country's ailing banking sector and arranging the sale of BCA and Bank Niaga.

According to sources, Jerry has been offered key positions at BCA and the Singapore office of Standard Chartered Bank.

Prijadi also installed on Tuesday Hendy Herijanto as IBRA deputy chairman for risk management. He replaces Chandra Purnama, who has been appointed deputy chairman for support and administration at IBRA.

Hendy has been in IBRA's risk management department since 1998. (rei)