Robby to lead Bank Mandiri, Gani new Garuda president

Robby to lead Bank Mandiri, Gani new Garuda president

JAKARTA (JP): The government installed former PT Garuda
Indonesia president Robby Djohan at the helm of newly established
Bank Mandiri on Friday in its effort to speed up the
restructuring of the country's disordered state banks.

State Minister of the Empowerment of State Enterprises Tanri
Abeng also announced on Friday the appointment of Abdul Gani, one
of his assistants who was formerly president of Bank Duta, as
Robby's successor at the national airline.

Tanri said Robby as the bank's president would form a perfect
team with former finance minister Mar'ie Muhammad -- installed as
chief commissioner early last month -- in the quest to make it a
quality institution.

"This is an optimum combination to build Bank Mandiri to
become a world-class operator with a strong reputation," he told
reporters at a news conference on the management reshuffle in the
two state-owned companies.

Known as the "Mr. Clean" of Indonesian politics, Mar'ie is
chairman of the Indonesian Transparency Society.

Bank Mandiri was established on Oct. 2 as a medium to clean up
and merge four of the seven state banks; Bank Bumi Daya (BBD),
Bank Pembangunan Indonesia (Bapindo), Bank Dagang Negara (BDN)
and Bank Ekspor Impor Indonesia (Bank Exim)).

They have combined total assets of Rp 269 trillion (US$33.6
billion) but are saddled with massive amounts of nonperforming
loans.

Most of the loans are believed to have been channeled to
businesses of the family of Soeharto and its intimate circle
during his 32-year presidency.

The merger process is scheduled to be completed by 2000.

Sources said various parties had applied pressure to have
their candidates head Bank Mandiri. The government appointed an
interim president, Mulyohardjoko, when the bank was established.
Mulyohardjoko is retained as president of state-owned pension
fund PT Taspen.

Tanri pledged that Robby and Mar'ie would be given full
freedom in running Bank Mandiri.

"I'm glad that the minister has given us the full freedom
which means that the government will not intervene in our daily
operation," Mar'ie said.

Robby, also a former president of Bank Niaga, said: "I never
want to work under any external pressure. I can always resign if
they do that to me."

He promised he would accelerate the process of restructuring
and cleaning up the state banking sector because "time is not on
our side".

"But regaining the bad loans may take quite a long time," he
admitted. He added its success would also depend heavily on the
improvement in the country's economic condition.

Layoffs will be the last option in the effort to boost the
banks' efficiency, Robby said.

The Indonesian Bank Restructuring Agency (IBRA) has appointed
Germany's Deutsche Bank as the consultant for the merger process.
Due diligence on financing of the banks is currently underway to
determine the extent of their nonperforming loans.

The government has yet to decide whether Bank Mandiri will
have to settle bad loans by itself or transfer the task to IBRA's
asset management unit.

Mar'ie said: "Deutsche Bank signed the contract with IBRA.
The possibility is still open for us to hire another consultant
or an additional one."

Tanri said Robby was appointed chief commissioner of the
ailing airline in an effort to maintain continuity in the ongoing
restructuring process at Garuda Indonesia.

Since joining Garuda in June, Robby has initiated painful
restructuring measures in a bid to put the airline into the black
by year's end.

Measures include the return of 26 leased aircraft and
rescheduling of about US$400 million in overseas loans. A massive
program of voluntary dismissals is also underway. (rei)