House may block planned sale of Permata stake
The Jakarta Post, Jakarta
The House of Representatives may block the planned sale of the government's majority stake in Bank Permata unless the Indonesian Bank Restructuring Agency clears the way of all potential stumbling blocks, including the resolution of a long-running legal saga involving the bank.
Hakam Najam, a senior legislator on the House's finance commission, said on Saturday that it was essential that these matters be settled to avoid possible repercussions in the future.
"For Permata, we want everything to be clear first. We don't anything fishy or opaque to be hanging over the bank. Like the cessie case, for example, which is still a problem," Hakam said on the sidelines of a seminar.
The case Hakam was referring to revolved around a protracted legal confrontation between the agency and the Attorney's General Office (AGO).
Permata was formed as the country's 10th largest bank two years ago from a merger of five ailing banks being administered by IBRA -- 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.
It later turned out that the merger process funds totaling Rp 456.5 billion had been employed which were, in fact, not to be touched as they were the subject of legal proceedings involving the managing director of PT Era Giat Prima (EGP), Djoko Tjandra, in a case popularly referred to as the Bank Bali scandal.
The scandal, which came to light in 1999, centered on allegations that Djoko and a number of other influential people obtained the money from Bank Bali based on an illegal transaction, and that losses had been caused to the state as a result.
However, the Supreme Court recently acquitted Djoko off all charges, which means that IBRA has to return all the money to EGP.
Failing to quickly resolve the case, Hakam added, would make it difficult for the House to approve the plan.
Under the law, IBRA has to secure the approval of the House for any divestment plans it might have for the banks under its supervision.
"So, approval will be forthcoming as long as all the requirements have been met. If not, then we will not force it," he said.
IBRA, which holds a 91.3 percent stake in the bank, has said that it wanted to sell a stake of up to 71 percent in the bank later this month. It also said it hoped the deal would be concluded before it is wound up on Feb. 27.
It plans to seek this approval during the House's next session.
Selling Permata, along with the ongoing Bank Lippo auction, is the last remaining task facing the agency, having already sold in the past two years majority stakes in Bank Central Asia (BCA), Bank Niaga, Bank Danamon and Bank Internasional Indonesia (BII).
Umar Juoro, an economist at the Center for Information and Development Studies (CIDES), also urged IBRA not to rush in selling the bank when all the necessary preparations had not been completed.
Even if the sale is not carried out by IBRA, Umar added, its successor institution could complete it.
The government is planning to set up a state agency under the auspices of the Office of State Minister of State Enterprises to replace IBRA in managing unsold assets.