Legal status of closed bank owners questioned

JAKARTA (JP): Bank Indonesia, the central bank, must clarify the legal status of the owners of the 16 banks recently closed by the government, legal experts said here yesterday.

Economics law consultant Abdul Hakim G. Nusantara said legal aspects regarding the closure of the 16 private banks last month remained unclear, including the legal status of their shareholders.

The uncertainty was reflected in the case of President Soeharto's son Bambang Trihatmodjo, who owned a 25 percent stake in the closed Bank Andromeda, Hakim said.

After Bank Andromeda's closure, Bambang, chairman of the Bimantara Group, reportedly acquired the license of Bank Alfa. Bank Alfa's assets and liabilities had earlier been taken over by Bank Risjad Salim International of the giant Salim Group.

Bank Alfa has since acquired the assets and liabilities of the closed Bank Andromeda.

Hakim said the owners of the closed banks, including those of Bank Andromeda, could be blacklisted by Bank Indonesia if found liable for the mismanagement of public funds.

However, the implementation of the law did not indicate this, he said at a discussion on the economic legal system in the country.

"The acquisition of Bank Andromeda (by Bank Alfa) came before Bank Andromeda's liquidation process even began," he said.

Bank Indonesia Governor J. Soedradjad Djiwandono said in a House of Representative hearing recently that commissioners or owners of the closed banks would not be blacklisted if they were found not responsible for making their banks insolvent.

Hakim said it was not clear if the law was imposed on the banks as institutions or the owners themselves.

"The criteria for the blacklisting process was not transparent," he said.

In the case of Bambang, Hakim said, his motivation for acquiring Bank Alfa could be to speed up Bank Andromeda's liquidation process.

"If this could solve the problem of returning funds to depositors, then make it a model solution for the other 15 banks too," Hakim said.

Economics legal analyst Hamid Awaludin said yesterday owners of banks which violated the law, could also be prosecuted under criminal charges in addition to administrative sanctions.

Hamid said the personal assets of the banks' owners could be liquidated to pay their depositors.

However, during the interim between the banks' closures and the time liquidation teams were required to be set up, the finance ministry and central bank had not taken any action, he said.

"This could encourage the banks' owners to conceal their personal wealth," he said.

Abdul Hakim said the government must also address issues on bank transparency before it could regain public trust, he said.

Hakim said Bank Indonesia must also review its concept of bank secrecy, since it had been used as a shield to cover financial problems.

"Bank secrecy is supposed to protect depositors, so that the banks cannot disclose any information regarding their depositors," said Pradjoto, a legal consultant of Pradjoto and Partners.

Former House of Representative member Tadjudin Noer Said stated at yesterday's discussion that the government tended to reform the economy only when it faced hardship.

He said economic reforms seemed to be established in reaction to urgent needs, instead of being carefully planned.

"It seems we only deregulate or cut bureaucratic tape when we need to borrow money," Tadjudin, known as an outspoken house member representing the ruling Golkar during the 1992-1997 period, said.

As a result, many legal aspects of economic reforms remained unclear, he said.

When Singapore was reforming its economy, it focussed its attention on the legal aspects, he said.

In Indonesia, the uncertainty caused economic reform to be less effective, he said. (das)