JSX suspends Bank Global shares

JSX suspends Bank Global shares

The Jakarta Stock Exchange (JSX) suspended trading in the
shares of small-size Bank Global Internasional on Thursday over
reports that the bank's capital adequacy ratio (CAR) had declined
sharply, due to problems with its mutual fund products.

In a statement, the JSX said it had suspended
share trading in its early session to prevent irregular
fluctuations in the bank's shares, following reports over the
bank's condition and over unanswered material questions requested
by the bourse.

"In relation to recent reports on Bank Global, and since the
JSX is yet to receive answers regarding some information deemed
material that could affect the bank's operation, the JSX decided
to temporarily suspend the bank's shares," the bourse said.

Bank Global shares were suspended at Rp 340 per share.

As reported by several local media, the central bank has put
Bank Global under its special surveillance unit since Oct. 27,
following a sharp decline in its CAR to below the minimum
requirement of 8 percent from 44.84 percent in September.

The drop in the bank's CAR is attributable, among other
things, to the bank's so-termed "Prudence" mutual funds, which
were not properly managed and were unilaterally converted into
deposits without the consent of its customers.

Several of the bank's mutual fund customers were reportedly
unable to withdraw their money, as the money had been kept as
deposits in the bank.

But bank officials have denied the media reports, saying the
bank never launched any mutual fund products. -- JP