Repurchase of QAF shares by Salim 'unethical'

Repurchase of QAF shares by Salim 'unethical'

JAKARTA (JP): Coordinating Minister for the Economy Rizal
Ramli said on Thursday that the repurchase of QAF Pte. Ltd.'s
shares this week by the Salim Group was "unethical."

Rizal said that although there was no law forbidding Salim to
repurchase its assets, it was unethical because the business
group had not settled their debts to the government.

"They haven't settled their debt, but in reality, they have
the money to buy assets," he told reporters following a meeting
with Vice President Megawati Soekarnoputri.

The Salim Group is the former owner of the publicly listed
Bank Central Asia (BCA), which owes some Rp 53 trillion to the
government after the bank received massive liquidity support via
Bank Indonesia. The huge obligation was also due to violations of
the legal lending limit in which the bank channeled most of its
money to its affiliated businesses.

To repay its obligations, Salim surrendered to the Indonesian
Bank Restructuring Agency (IBRA) some of its assets, including
shares in various companies like the Singapore-listed QAF.

IBRA announced this week that it had sold its more than 19
percent stake in QAF to company chairman Didi Dawis of Qalif
Ltd., a unit of the Salim Group, for more than S$35 million.

QAF is a holding company, running various businesses including
bread making, logistics, supermarkets, and trading.

Legislators have also criticized plans by some former bank
owners to repurchase their assets from IBRA because they had
claimed they had no money to repay their debts to the government.

The legislators also warned the government not to allow the
business tycoons to repurchase their assets because the country's
economic structure would then be again controlled by only a
handful of conglomerates.

There has been speculation in the Jakarta financial market
that Salim is also planning to buy back BCA, the group's former
financial flagship.

IBRA plans to divest all of its more than 70 percent stake in
BCA in March next year.

In addition to Salim, the other business tycoons who had
pledged assets to IBRA to repay similar obligations to the
government include, Sjamsul Nursalim, Bob Hasan and Sudwikatmono.
Their banks have been closed down by the government.

Rizal is scheduled to meet with the businessmen today to push
them to surrender more of the assets to IBRA and provide personal
guarantees.

Kwik Kian Gie, Rizal's predecessor, was the first to demand
the tycoons inject more assets because the amount of assets they
pledged last year was insufficient to cover their obligations.

The assets pledged by the Salim Group, for instance, is only
worth around Rp 20 trillion (US$2.2 billion) compared to its
total obligation of Rp 53 trillion.

Rizal had said earlier if the tycoons refused to inject
additional assets, they would risk legal sanctions.

There have been calls for former bank owners who have violated
their banks legal lending limit ruling, to be slapped with legal
sanctions.

But under the Master of Settlement and Acquisition Agreement
or MSAA with IBRA, the ex-bank owners are free of any legal
sanctions as long as they repay their debts to the government.
(rei)