Kwik opposes divestment of Bank Niaga

Kwik opposes divestment of Bank Niaga

The Jakarta Post, Semarang

State Minister for National Development Planning Kwik Kian Gie
has reiterated his opposition to the government's plan to sell
Bank Niaga, arguing that the divestment would be a huge loss to
the people.

"I think it would be better not to sell Bank Niaga. I had
earlier taken a similar position on the divestment of BCA. I am
also against this new divestment," Kwik told reporters here on
Friday.

He said with the divestment spree, the state's assets will
soon be exhausted.

"I had fought against the divestment of BCA, and I lost. My
protest against the selling of Bank Niaga will also be apparently
ignored," he said, as quoted by Antara.

The divestment of BCA, Bank Niaga and some other banks is
based on the prodding of the International Monetary Fund (IMF),
as outlined in the recent Letter of Intent.

Kwik disclosed that the IMF has set a deadline for the selling
of the banks -- Bank Niaga by the end of this month, while
Danamon and Mandiri by the end of this year.

The minister said selling Bank Niaga would be repeating the
same mistake committed by the government in divesting 51 percent
of BCA shares. By selling 51 percent of BCA's shares, the
government earned Rp 5 trillion (US$555 million), but the bank
has a total bond of Rp 60 trillion to be paid by the government.

Twelve months after the BCA sale, the government will have to
pay Rp 10 trillion in bond interest, or equivalent to 100 percent
of BCA shares.

Kwik noted that the same modus, albeit with a different
amount, applies in the divestment of Bank Niaga. From the sales
of 51 percent of the bank's shares, the government will collect
Rp 1 trillion. However, the bank has a total bond of Rp 8.3
trillion, to be paid by the government.

"Even a sidewalk vendor knows that it is a loss to the people.
But the IMF claims that it is necessary to restore the confidence
of foreign investors. Alas, no investor has come in," Kwik said
in an interactive dialog at the Diponegoro University here.