Hendra to come back, face truth

Hendra to come back, face truth

JAKARTA (JP): Businessman Hendra Rahardja, who is still
abroad, will return to Indonesia and take responsibility for his
two liquidated banks, Bank Harapan Sentosa (BHS) and Bank Guna
International (BGI), his lawyer said yesterday.

Alamsyah Hanafiah denied allegations that his client had fled
the country to avoid the consequences of the liquidation.

His two banks -- which have total assets worth an estimated Rp
4.7 trillion (US$1.4 billion) -- were among the 16 ailing private
banks liquidated by the government in a bid to improve confidence
in the country's economy.

"Hendra is not running away from the country and he's not
taking the customers' money away either," Alamsyah told a press
conference.

Alamsyah assured BHS and BGI customers and employees that the
banks' commissioners and directors would be able to repay all
their money and take responsibility for the effects of the
liquidation.

"We estimate that the total funds from the future auction of
the banks' assets, including the 218 buildings nationwide, will
surpass the debts and liabilities to be paid by the two banks."

He refused to disclose the exact amount of the banks' assets
or debts.

"That'll be announced by the government's team involved in the
liquidation."

Hendra has a 38.40 percent stake in BHS, which had at least
3,800 employees.

The downfall of BHS was reportedly due to Hendra's aggressive
investments, especially in the property sector where he
constructed many buildings for bank offices and several housing
estates in Tangerang and Bogor, West Java.

In 1996, when the bank's paid-up capital reached Rp 207.8
billion, reports said its credit for property projects was
allegedly about Rp 279.3 billion, far in excess of its legal
lending limit of only Rp 20.8 billion.

BHS's balance of payments, issued as of June 1997, showed that
the bank's assets were Rp 4.3 trillion but, according to the
central bank, they were valued at only Rp 3.37 trillion, the
reports said.

Alamsyah admitted that Hendra was still living in another
country.

"Hendra had gone abroad to undertake medical treatment for his
illness long before the government announced its liquidation
policy."

He said Hendra left the country about three months ago.

"But, he will return to the country as soon as the doctors
allow him to."

Alamsyah refused to disclose the illness or the hospital and
the country where Hendra is being treated.

"I'm sorry I can't give the name of the hospital. He is sick
and needs some rest. We can't let reporters visit him and ask him
questions about the banks."

A director of one of the banks told Hendra about the
liquidation two days after the government's announcement, he
said.

"The delay in informing Hendra was due to his illness. We were
afraid that the bad news would just worsen his condition."

Local publications reported that Hendra, a brother of the
notorious tycoon Eddy Tanzil who is wanted by police for
corruption, had gone to Singapore for medical reasons and
investigating police have tried to get him to return.

Alamsyah refuted allegations that National Police chief Gen.
Dibyo Widodo had gone to Singapore to pick up Hendra.

"That's not right. The liquidation (of BHS and BGI) is not the
police's business because there were no criminal acts involved."

He said Hendra was not in any way under police investigation.

"That's impossible. If he was being investigated, he would
have been questioned in his lawyers presence," Alamsyah, who was
appointed to represent Hendra on Nov. 1, said.

Alamsyah also denied allegations that some 123 BHS accounts
owned by the Tanzil family have been seized by Bank Indonesia.

"That's also not true. We haven't heard about it, that's not
clear." (cst)