RI's Baring back to business soon
RI's Baring back to business soon
JAKARTA (JP): PT Baring Securities Indonesia (BSI), the
Indonesian division of the collapsed British merchant bank
Barings, is likely to resume trading on the Jakarta Stock
Exchange (JSX) tomorrow.
John Marshall, BSI's president, said yesterday that he expects
the Indonesian arm of the British investment bank to resume full
trading on Thursday.
"Technically, there is no problem to resume trading but we
have to get approval from the JSX and the Capital Market
Supervisory Agency," Marshall told The Jakarta Post.
BSI, a major securities company in Indonesia, suspended
trading last week in the wake of the derivatives dealing scandal
involving its London-based principal company.
The British bank was reported to have incurred financial
losses of about US$1.4 billion from derivatives trading carried
out by its business arm in Singapore.
Achmad Daniri, a JSX executive, said yesterday that BSI should
first settle all the transactions it made last week before it
fully resumes trading.
"Baring wants to resume trading tomorrow but we ask them to
first settle all last week's transactions," Daniri told the Post.
Marshall said that BSI, which last year topped the list of the
most active securities companies on the JSX, faced no
difficulties at all to meet the JSX requirement.
"Everything about the settlement is OK. The transactions
carried out last week have been all settled through KDEI, the
clearing and settlement agency," he said.
Internationale Nederlanden Groep (ING), a Dutch financial
services giant, agreed early this week to take over a majority
stake in Barings, Britain's oldest merchant bank, for $1.075
billion.
Marshall said that the change in the majority ownership of the
British bank would not have a negative effect to the BSI
management.
"There will be no layoffs. There is no reason for that," he
said, adding that the change in ownership of Barings Plc. will
not change the BSI business strategy. "We, instead, expect that
the entry of ING will not only further improve our financial
structure but also our business networks," he added.
BSI is 80 percent owned by Barings and 20 percent by an
Indonesian partner.
Losses
ING chairman Aad Jacobs told the press Monday that losses from
the collapsed merchant bank Barings stand at 860 million pounds
($1.38 billion).
Jacobs revised figures given earlier in the day by a solicitor
for the bank's administrators who had said Barings' losses
totaled 916 million pounds ($1.466 billion). No reason was given
for the difference in figures.
The ING chairman also said he intended to return all assets
currently frozen and to reimburse 100 percent of liabilities.
"But we won't accept unknown liabilities coming after today,"
he said, AFP reported.
The British High Court approved late Monday administrator
Ernst and Young's plan to sell Barings to the Dutch banking group
ING.
Britain's oldest merchant bank collapsed in spectacular
fashion on Feb. 26 after running up massive losses as a result of
bad derivatives deals blamed on a 28-year-old trader in
Singapore, who is now in police custody in Germany.
The potential liability of the open positions was the major
obstacle to the Bank of England's efforts to rescue 233-year-old
Barings. On Feb. 26, the administrators had estimated the losses
as around $900 million.(hen)