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)