Govt slaps travel ban on officials of ailing banks

Govt slaps travel ban on officials of ailing banks

SEMARANG (JP): Minister of Justice Muladi has announced an
overseas travel ban on 50 executives and owners of 14 troubled
banks recently suspended or taken over by the government.

Muladi said here Saturday the travel ban was made effective
for 30 days as of April 4, when the Indonesian Bank Restructuring
Agency (IBRA) suspended the operation of seven insolvent banks
and assumed the management of seven other problem banks.

He said the measure, imposed to allow the authorities to
question the executives on the state of their institutions, could
be extended for another six months should the need arise.

"The Ministry of Justice imposed the ban after close
coordination with the Ministry of Finance and the National
Police," Muladi told the media here.

The minister said the travel ban was also to prevent any
possibility of the individuals leaving the country with public
funds.

"I am not accusing them of having committed crimes...
However, I don't rule out the possibility that this matter could
lead to a criminal investigation," he said.

The suspended banks are Bank Surya and Bank Subentra,
controlled by President Soeharto's cousin Sudwikatmono, Bank
Kredit Asia and Bank Pelita, controlled by Hashim
Djojohadikusumo, Bank Centris by Andri Tedjadharma, Deka Bank by
Dewanto Kurniawan and Bank Hokindo by the Hokianto family.

IBRA said its criteria for freezing the operations of the
banks was if government liquidity credits were equivalent to both
more than five times the banks' total equity, and 75 percent or
more of their total assets.

Banks which had their management placed under IBRA are Bank
Umum Nasional, controlled by Minister of Industry and Trade
Mohamad "Bob" Hasan, Bank PDFCI, controlled by PT Bahana Investa
Argha, Bank BDNI by businessman Sjamsul Nursalim, Bank Danamon by
Usman Atmadjaja, Modern Bank by Samadikun Hartono and Bank Tiara
Asia by the Ometraco Group and the state Bank Ekspor Impor
Indonesia.

The IBRA move was part of government efforts to strengthen the
ailing national banking sector.

The 14 banks are part of 54 problem banks which have been put
under IBRA supervision after they received liquidity credits from
Bank Indonesia equivalent to more than 200 percent of their
capital, or had capital less than 5 percent of their assets.

The spokesman for Hashim Djojohadikusumo's Tirtamas Group,
Jannus O. Hutapea, said in a statement here yesterday that the
shareholders of Bank Pelita and Bank Kredit Asia would remain in
the country and cooperate fully with the government.

Bank Pelita president Agus Anwar and Bank Kredit Asia
president Syafril Nur were quoted by Jannus as saying that they
would comply with the rules and cooperate completely with the
authorities or IBRA in settling any outstanding issues on the
banks' assets.

They said they were working with IBRA in discharging their
employees. Bank Pelita employs about 500 people and Bank Kredit
Asia has 80 staff.

The Tirtamas Group initially planned to merge the two banks
with Bank Papan Sejahtera, also controlled by Hashim, Jannus
said, but the plan was canceled.

Meanwhile, Bank Internasional Indonesia (BII) announced
Saturday that its planned merger with four other local banks had
been canceled.

BII said in a statement that the merger with Bank Dagang
Nasional Indonesia (BDNI), Bank Tiara Asia, Bank Dewa Rutji and
Bank Sahid Gadjah Perkasa was called off because the management
of BDNI and Tiara Asia were now under IBRA. (har/rid)