IBRA submits documents for screening BCA bidders to BI

IBRA submits documents for screening BCA bidders to BI

The Jakarta Post, Jakarta

Bank Indonesia said it had received from the Indonesian Bank
Restructuring Agency (IBRA) related documents required to
complete the assessment process for the four bidders vying for a
51 percent stake in Bank Central Asia (BCA).

However, the central bank said it would also need one or two
more days to determine whether or not the submitted data was
complete.

"IBRA has submitted those documents to us. We are now checking
whether they have been completed properly," BI spokesman Halim
Alamsyah said on Tuesday.

The central bank and IBRA had earlier set a Monday deadline
for all the bidders to submit the required documents.

The final four bidders are led by U.K.-based Standard
Chartered Plc., U.S. investment company Farallon, PT Bank Mega,
and GKBI Investments. They are competing to buy the government's
51 percent stake in BCA, the country's largest retail bank.

Meanwhile, in a release issued on Tuesday, StanChart said that
it had submitted all the data required for the test before the
deadline.

Ray Ferguson, the bank's chief executive said: "BI also has in
its possession the Standard Chartered Bank signed letter of
comfort."

The letter of comfort refers to the consortium's willingness
to guarantee to inject funds should the bank endure liquidity
problems.

Without underestimating Bank Mega and GKBI, which are locally-
led bidders, StanChart and Farallon seem to be the clear
favorites to win the bid.

Now that all the would-be investors have met the deadline for
the documents, BI now has 30 days to complete its fit and proper
tests on each of them. BI Governor Sjahril Sabirin has however,
repeatedly expressed optimism that the whole process could be
finalized in less than 30 days.

With IBRA saying it would need around two weeks to determine
the winner after the BI-administered test, the closely-watched
BCA auction should then be finalized by the end of March.

After almost two years of failed efforts, the sale will be
seen as crucial in regaining confidence from international
investors.

Investors have put the country off their radar, mostly due to
the government's poor commitments in honoring contracts with
foreign investors.

The fit and proper test, which also includes a series of
'administrative' screenings and interviews, was designed -- among
other things -- to prevent the bank's founder, the Salim Group
from reentering BCA.

All the bidders are required to sign a statement stipulating
that they have no links with the Salim Group or its affiliates
whatsoever.

The government banned Salim from regaining control of the
bank.

Under Salim's ownership, most of BCA's loans had been
channeled to business affiliates, thus violating the legal
lending limit requirement. The government had to inject massive
amounts of bonds to bailout the bank in the wake of the 1998
financial crisis.

The other objective of the test should be to ensure that none
of the investors are on the blacklist for bad bankers with Bank
Indonesia.

Since the government prohibits investors from using domestic
loans, the fit-and-proper test would also require them to reveal
their funding sources which they intend to use to acquire the
bank.