Govt to announce state bank shake-up
Govt to announce state bank shake-up
JAKARTA (JP): The government is poised to announce a major
shakeup in the management of three state banks joining the
government's recapitalization program, a minister said here on
Monday.
State Minister of Investment and State Enterprises Development
Laksamana Sukardi said the change in management could effect most
of the banks' boards of directors and commissioners.
"The announcement is coming soon," he said at his office.
Laksamana, who took up his ministerial post two months ago,
said the shakeup was necessary to ensure transparency in the
management of banks joining the government-sponsored bank
recapitalization program.
"This has become standard measure in the country's bank
restructuring program," said the banker-turned-politician.
Members of the boards of directors and commissioners at
several recapitalized private banks also have been replaced to
ensure the success of their recapitalization, he said.
Laksamana said a major factor in the success of the bank
recapitalization program was transparency.
"We will create transparency by changing the boards of
directors and commissioners of the recapitalized banks," he said.
Four of the country's seven state banks -- Bank Pembangunan
Indonesia, Bank Bumi Daya, Bank Dagang Negara and Bank Ekspor
Impor Indonesia -- were merged to form Bank Mandiri. The move was
part of the government's effort to beef up the operations of
state banks.
The other three state banks -- Bank Negara Indonesia (BNI),
Bank Rakyat Indonesia and Bank Tabungan Negara --
have been allowed to continue to operate independently.
Laksamana said the shakeup in the management of the state
banks was necessary to ensure the old directors and commissioners
did not attempt to conceal any misdeeds and errors committed by
the previous management.
"We definitely need fresh blood to create the transparency we
need," he said.
While he said he would not replace the entire boards of
directors and commissioners, he hinted there would be significant
changes.
He said he met on Monday with the management of BNI, the only
state bank listed on the Jakarta Stock Exchange, to discuss the
planned shakeup.
Laksamana expressed his pleasure with statements made by the
boards of directors and commissioners of BNI.
"They understood and are ready to step down for the sake of
the bank's future," he said.
Laksamana also said the government will look to raise funds
for the 1999-2000 budget through dividend payments it will
receive from its state companies, rather than by the
privatization of such companies.
He said the government will also raise funds for the current
budget by selling assets in taken-over and frozen banks managed
by the Indonesian Bank Restructuring Agency.
Instead of raising funds as previously planned by privatizing
state-owned companies, Laksamana said he would prefer to see
state-owned companies more profitable and give the government
higher returns from dividends. (udi)