KPPU warns of possible manipulation in BCA tender process
The Jakarta Post, Jakarta
The Business Competition Supervisory Commission (KPPU) expressed concern of possible manipulation in the sale process of the government's 51 percent stake in Bank Central Asia (BCA) due its lack of transparency.
KPPU said in a statement on Tuesday that the Indonesian Bank Restructuring Agency (IBRA) had no clear criteria in selecting the bidders for the BCA stake, and there was also no clear time table for when a necessary fit and proper test against the bidders could be conducted by Bank Indonesia.
"IBRA does not have a clear and transparent mechanism to ensure that the funding source of the strategic investors does not come from money laundering, ... or the Salim Group," KPPU said referring to the former owner of BCA which has been banned by the government from repurchasing the publicly listed bank.
The commission made the statement following an earlier hearing with IBRA and other related parties.
The BCA tender process has attracted much public scrutiny amid reports that the Salim family was trying to reenter the bank via nominee.
President Megawati Soekarnoputri has asked KPPU to keep a close eye on the sale process and report the findings to her.
The government-sanctioned commission was established in 1999 to help ensure fair business practices. Under Law No. 5/1999, the commission is authorized to cancel any transactions, if there is an indication of collusion.
The government via IBRA nationalized BCA, the country's largest retail bank, in the wake of the 1997 financial crisis to prevent the bank from collapsing. Salim had used most of the bank's money to finance affiliated businesses, thus violating central bank' regulations.
There are currently nine bidders eying the BCA stake. Among of the top bidders are Standard Chartered Bank, Farallon Capital, and Newbridge.
At the current stage, the bidding process has reached the due diligence investigation, with all bidders expected to submit their final bids before the Jan. 28 deadline.
There has been speculation that certain bidders are linked to Salim.