KPPU warns of possible manipulation in BCA tender process

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.