Rudy asserts right to control of Bank Bali
JAKARTA (JP): A day after the South Jakarta District Court dismissed charges of banking crimes against him, Rudy Ramli stepped up on Thursday his campaign to win back Bank Bali from the U.K.-based Standard Chartered Bank (SCB).
Rudy said he was now fighting another battle to have the State Administrative Court annul the banking authority's decision to take over his bank on April 23 and put it under SCB's management.
"I feel cheated after knowing that Bank Bali has been taken over by IBRA," Rudy told a press conference, referring to the Indonesian Bank Restructuring Agency.
"And why should IBRA have insisted that Bank Bali take SCB as its strategic partner? ...There's a mystery in this," he added.
The State Administrative Court on Thursday heard his lawsuit case against Bank Indonesia's Governor Sjahril Sabirin, whom he accused of illegally handing over his bank to IBRA.
IBRA has signed an investment agreement with SCB that entitles the UK bank to buy a 20 percent stake in Bank Bali to help finance the bank's recapitalization, and with an option to wholly own the bank, delist it from the domestic stock exchanges and turn it into a private company within five years.
IBRA also has assigned SCB to lead the bank's management under a three-year contract which has sharply been criticized by the House of Representatives as too favorable to the UK bank.
IBRA defended its move, saying that Bank Bali was nationalized because its controlling owners, the Ramli family, had failed to come up with cash to finance 20 percent of the bank's recapitalization costs.
Under the country's bank recapitalization program, the government would provide up to 80 percent of the recapitalization costs.
Rudy claimed that his bank would not have required recapitalization had then minister of finance Bambang Subianto approved the request from IBRA Chairman Glenn Yusuf on April 22, 1999 that the government settled his bank's claims worth Rp 904 billion with Bank BDNI under the government deposit guarantee scheme.
Bambang finally allowed the repayment of Bank Bali's interbank claims in late May under what is now known as the Bank Bali scandal as the repayment process allegedly involved political intervention and required Bank Bali to pay Rp 546 billion in commission to a broker company owned by politically well connected businessmen.
Rudy questioned the complete lack of transparency and total unfairness in which the government decided to nationalize his bank and to pick SCB as the strategic investor in the bank.
Rudy recalled how Bank Bali employees, who also felt robbed, had, until two weeks ago, staged protest rallies against SCB demanding that SCB's management and investment contracts with the bank be canceled.
But the agency sustained the contracts and only replaced the SCB management team at Bank Bali last week to expedite the process of the bank's rights issue, scheduled for later this month.
"It will be better for our country if SCB backs down," Rudy said, dismissing concern that foreign investors would be discouraged from investing in the country's banking sector if the government deal with SCB turned sour.
"Many investors remain greatly interested in investing in Bank Bali as long as the government makes the bidding process transparent and uses proper manners," Rudy said, adding that one foreign investor had already approached him.
The Netherlands-based ABN Amro bank and GE Capital of the U.S. were previously among the most serious foreign bidders for a stake in Bank Bali, besides SCB.
But Rudy regretted that IBRA had not responded properly to ABN Amro and GE Capital's strong interest.
Rudy began preliminary discussions with 10 foreign banks and finance companies in September, 1998, but the bidders were shortlisted to only four -- ABN AMRO, GE Capital, United Overseas Bank and Sanwa Bank -- in November. SCB entered the scene only in March, according to records at IBRA.
Like most other domestic banks, Bank Bali, which was used to be considered one of the best managed banks in the country and the only major bank that was not part of a widely-diversified business group, suffered financial distress as the impact of the rupiah meltdown.
Rudy had been accused of being involved in the Bank Bali scandal, but the South Jakarta District Court decided on Wednesday to dismiss the case against him and three other former Bank Bali directors due to an unclear indictment from the prosecutor.
Rudy is, however, facing corruption charges related to the scandal which are being prepared by the Attorney General's Office.
IBRA plans to launch a rights issue to facilitate the recapitalization of Bank Bali which is estimated to cost slightly more than Rp 4 trillion.
The agency would buy any rights which are not exercised by Bank Bali's existing shareholders and SCB would immediately purchase 20 percent of IBRA's shares.
The Jakarta Stock Exchange (JSX) announced on Thursday that it had lifted the trading suspension on Bank Bali shares, which were clamped in August, after the bank provided the necessary information surrounding the Bank Bali scandal.
The JSX said that trading on Bank Bali shares could start on Friday, thereby expediting its rights issue licensing. (rei)