IBRA says BCA sale team violates rules

IBRA says BCA sale team violates rules

Berni K. Moestafa, The Jakarta Post, Jakarta

Plans for a high level team to select the winner in the
bidding process of Bank Central Asia (BCA) has met with criticism
by the agency in charge of the sale, claiming the plan would
violate government rulings on asset sales.

The chairman of the Indonesian Bank Restructuring Agency
(IBRA), I Putu Gede Ary Suta, demanded the government change the
pertinent regulation before setting up the team.

"If they want a joint team then they should first change
Government Regulation 17," Ary Suta was quoted as saying by
Antara during a seminar.

The ruling in question forms IBRA's legal basis, and grants
the agency full authority to initiate and close the sale of a
state asset.

But as IBRA was preparing to name a winner in the BCA bidding
this week, the government stepped in with plans to form the joint
team.

State Minister for State Enterprises Laksamana Sukardi, who
supervises IBRA, said earlier a high level team comprising
himself, Minister of Finance Boediono and Central Bank governor
Sjahril Sabirin, among others, should have the final say on the
BCA sale.

The team is meant to increase confidence in the outcome of the
BCA sale, which has become a litmus test for the government's
ability to attract foreign investment.

Ary Suta said he had not been informed beforehand of the
formation of the team, and Laksamana did not say whether the IBRA
chief would be included on the team.

According to Laksamana, "funny things" tended to occur when
one side controlled the entire sale process.

His remark came just as the International Monetary Fund (IMF)
praised IBRA's handling of the BCA sale.

But the agency has been the target of public criticism for
some time for what many believe is its lack of transparency in
the BCA sale process.

IBRA has dismissed this criticism, though one bidder, the U.S.
investment firm Farallon Capital Management, complained that it
has been left in the dark for nearly a month since submitting its
final bid to IBRA.

Farallon and Standard Chartered Bank Plc are the final two
bidders in the race for a 51 percent stake in BCA.

Economist Faisal Basri opined that the need to set up a
separate team for the BCA sale proved that IBRA had lost its
credibility.

The sale of BCA has dragged on for over three years, with the
current bid marking the third attempt to find a strategic
investor for the bank.

Faisal blamed the problems on Ary Suta, whom he called the
source of IBRA's waning credibility.

"One should first solve the problem with IBRA's credibility,"
he said.

Ary Suta took over the agency in July last year, and
immediately caused controversy with his radical restructuring
plans for IBRA.

Officials said Ary Suta effectively put a halt to work at the
agency for nearly three months, but he nonetheless managed to
meet the agency's annual target for asset sales.

Many believe this achievement allowed Ary to maintain his
position at IBRA, though Faisal urged the government to remove
him.

"All of our problems are in IBRA, so as long as there are no
changes and the current chairman is not replaced, all of the
problems in IBRA will continue to exist," Faisal said.

He pointed to IBRA's criticized sale of PT Indomobil Sukses
Internasional, which allegedly violated the anti-monopoly law.

Faisal is a member of the Business Competition Supervisory
Commission, which is investigating Indomobil's tender process.

The commission said it may announce its findings in the case
sometime this month.