Govt urges Permata to explore rescue plans
Govt urges Permata to explore rescue plans
The Jakarta Post, Jakarta
Bank Permata, caught in the middle of a legal dispute between the
Indonesian Bank Restructuring Agency (IBRA) and the Attorney
General's Office, has been asked to study options to salvage the
bank in case resolution of the dispute causes harm to its
capital.
State Minister of State Enterprises Laksamana Sukardi said on
Monday that one possible option was to raise money from investors
via private placement.
"Support from the government would not be easy because of the
tight state budget. The quickest way should be through private
placement.
"But we need to ensure this is in line with the overall
economic climate," Laksamana said.
Laksamana's office oversees IBRA, which owns 99.6 percent of
the medium-sized bank.
His remarks could send signals the bank would be privatized
sooner than the initial schedule of next year.
Permata emerged last year as the country's 10th-largest bank
from a merger of five ailing banks controlled by IBRA, including
Bank Bali, Bank Universal, Bank Arthamedia, Bank Prima Express
and Bank Patriot. The agency, which took over several troubled
banks in the wake of the late 1990s financial crisis, used public
funds to finance the merger process.
As of the first quarter of 2003, Permata booked a Rp 102
billion net profit, with total assets of Rp 28 trillion. The
bank's capital adequacy ratio (CAR) reached 10.3 percent, above
Bank Indonesia's minimum requirement of 8 percent.
The financial health of the bank, however, is now in danger
after a revelation that IBRA, in the merger process, had used
funds totaling Rp 456.5 billion -- not supposed to have been used
as they served as evidence in legal proceedings involving
director of PT Era Giat Prima (EGP) businessman Djoko Tjandra, in
a case popularly known as the Bank Bali scandal.
The scandal, which came to light in 1999, revolved around the
accusation that Djoko and a couple of other influential people
obtained the money from Bank Bali in a transaction that was
against the law and caused losses to the state.
During the legal proceedings, the funds were stashed in Bank
Bali in an EGP escrow account.
Things turned from bad to worse for IBRA after the Supreme
Court cleared Djoko off all charges, meaning that IBRA had to
return all the funds to EGP. Since then, IBRA has been trying
hard to keep the money within the bank to avoid serious harm to
Bank Permata, despite pressure from the Attorney General's
Office.
Against this backdrop, calls have been rising for the bank to
start drawing up plans to free itself from the looming financial
troubles, with Laksamana's being the latest.
Laksamana said that the government, as Permata's majority
shareholder via IBRA, would ask the bank's management to prepare
and explore possible options as rescue plans.
Initially, IBRA had planned to divest the majority of the bank
only after it had completed the divestment process of Bank Lippo
and Bank Internasional Indonesia (BII), both of which are
expected to be concluded by the end of the year.