IBRA to decide on status of BCA sale

IBRA to decide on status of BCA sale

JAKARTA (JP): The Indonesian Bank Restructuring Agency (IBRA)
said on Tuesday it would decide on its divestment of PT Bank
Central Asia (BCA) by Friday following calls to re-tender the
sale of the bank.

IBRA chairman I Putu Gede Ary Suta said that the agency would
evaluate how to decide on BCA's sale through a private placement
on Friday.

"This (divestment) is an ongoing process. We will make an
announcement later after the conclusion of the negotiations,"
said Ary Suta, following a hearing with the House of
Representatives' Commission II for home and legal affairs.

He was commenting on calls by the Oversight Committee, which
supervises IBRA's policies, to re-tender the sale of the
government's 30 percent stake in BCA.

On Monday, the committee's chairman, Mar'ie Muhammad, said
that BCA's tender should meet the requirements that would ensure
a suitable strategic partner for the bank.

The government must divest a 40 percent stake in BCA this year
as part of its agreement with the International Monetary Fund
(IMF).

But BCA's sale has drawn some criticism in part because of the
time-consuming process involved, and the lack of transparency
with which it is being conducted.

Until now, it remains unclear who the bidders are and what
stage of the bidding process has been reached.

Former coordinating minister for the economy and legislator
Kwik Kian Gie said in an interview with the Kompas daily on
Monday that he suspected collusion between legislators,
government officials and BCA's bidder.

Kwik estimated that BCA's tender process was designed in such
way to allow a certain bidder to win. He suspected this bidder
was an investment firm acting as a vehicle for BCA's founding
shareholder, the Salim Group.

IBRA forbids former shareholders of banks it has restructured
from returning and taking a controlling stake in their former
banks.

But it cannot trace the source of money used by an investment
firm on behalf of investors to acquire BCA's stake.

Unconfirmed reports have said that only two bidders remain.
They are New Bridge Capital and Indonesia Recovery Company
Limited (IRCL). Both are investment firms.

Ary Suta was unable to confirm the identity of the bidders,
saying he too had not yet been informed about their identities.

According to him, the tender process for BCA began in May last
year and, to the best of his knowledge, attracted between 55 and
60 bidders.

IBRA earlier this month sold a 10 percent stake in BCA through
a secondary public offering which, the agency said, was
oversubscribed due to strong investor interest.

But this too was shrouded in controversy as some analysts
suspected insider trading to have tainted the public offering.

BCA's lead underwriter, state owned PT Danareksa Securities,
denied on Tuesday such allegations, promising to clarify the
matter through an internal audit.

The Capital Market Supervisory Agency also announced on
Tuesday that its preliminary investigations had found no evidence
of insider trading practices.

The slow tender process has sparked concern that BCA may have
failed to attract the right price.

According to Mar'ie, the government has decided to delay the
divestment for this reason.

Earlier, IBRA statements only acknowledged the need for more
time to negotiate a "better deal".

Separately, IBRA deputy for bank restructuring Felia Salim
said the agency was lagging behind in the BCA sale, as it had
been preoccupied with the acquisition of Bank Internasional
Indonesia (BII).

IBRA suspended further negotiations with bidders during the
secondary offering period late last month.

"It will take some time as we still have to proceed with some
administrative and legal matters," Felia told The Jakarta Post.

She declined to say when she expected the completion of BCA's
divestment process.

According to government documents, the BCA divestment is
slated for completion for the third quarter, meaning by the end
of September at the latest. (bkm)