Laksamana wants top investor for BCA

The Jakarta Post, Jakarta

The buyer of the government's majority stake in Bank Central Asia (BCA) must be a strong and reputable bank able to help reinvigorate the country's weak banking industry, State Minister for State Enterprises Laksamana Sukardi has said.

Speaking at a breaking of the fast gathering with journalists late Thursday, Laksamana said he did not want to see the 51 percent stake in BCA fall into the hands of brokers, who would then resell the equity to other investors.

His statement came amid growing fears that BCA's former owner, the Salim family, was planning to repurchase the country's largest retail bank through a nominee.

BCA was nationalized in 1998 at the height of the country's financial crisis, which prompted the government to inject the Indonesian banking system with billions of dollars worth of recapitalization bonds. The bank had lent most of its funds to Salim affiliated companies, thus breaching the legal lending limit.

Bank Indonesia had also injected BCA with huge amounts of additional funds prior to its takeover by the government to help repay depositors during a massive run on the bank in 1998. The Salim Group has surrendered ownership of 100 companies to the Indonesian Bank Restructuring Agency (IBRA), which also now controls BCA, in order to repay the government. Laksamana's office oversees IBRA.

The government is supposed to complete the divestment of its remaining 51 percent stake in BCA before the end of this year, with a due diligence process for nine shortlisted bidders to be completed by Dec. 21.

But Laksamana indicated that the government might extend the Dec. 21 deadline after some bidders, including Standard Chartered Bank, which analysts have said is the only reputable bidder, asked for an extra three weeks to complete the job. This means that the BCA sale may not be completed this year.

Earlier reports raised fears that, if the government forced bidders to meet the Dec. 21 deadline, only bidders linked to Salim would be able to complete the due diligence process, as they already had sufficient information on BCA.

Meanwhile, Bank Indonesia Governor Sjahril Sabirin was quoted by Detik.com as saying that the central bank would cast a keen eye over the BCA sale process to ensure that Salim did not regain control of the bank.