Rudy not to take part in Bank Bali rights issue

Rudy not to take part in Bank Bali rights issue

JAKARTA (JP): Former president and ex-majority shareholder of
publicly listed Bank Bali Rudy Ramli said on Thursday that he
would not participate in the bank's limited public offering next
month.

Speaking at a media conference, he said he would not use his
rights to buy new shares at the rights issue plan although he
knew it would mean a dilution of his ownership in the bank to
less than 1 percent.

"The reality is that I don't have the money," he told
reporters on rumors that his family was trying to gain
controlling interest in the bank, which was one of the country's
best performing banks before the economic crisis struck in 1997.

Rudy's family then controlled the bank, which was founded by
his father before they gradually reduced their ownership in the
bank to the approximate current 14 percent.

Bank Bali plans a right issue in late September to help raise
Rp 5.3 trillion in recapitalization funds. Existing shareholders
are entitled to buy 99 new shares for every share they already
hold in the 99-for-one issue.

Through the Indonesian Bank Restructuring Agency (IBRA), the
government will act as the standby buyer and is ready to inject
bonds of up to Rp 5.3 trillion (US$632 million) for any unsold
shares.

The government, through IBRA, took over the bank last year
after its existing shareholders failed to provide at least 20
percent of the bank's recapitalization cost.

Rudy filed suit against the government's takeover of his bank
and won the case. IBRA and Bank Indonesia appealed, but the
disputing parties later agreed on an out of court settlement that
saw the government paying Rudy Rp 9 billion in compensation.

As former owner of the bank, Rudy said he had a moral
obligation to help the bank regain its leading position in the
country's banking industry.

For that purpose, according to him, he would help IBRA find
foreign investors for the bank. "Six foreign investors have
expressed interest in buying the bank's shares," he told The
Jakarta Post after the news meeting. But Rudy declined to comment
on the identity of the potential investors.

During the meeting, he said he expected IBRA would start the
tender process as soon as the government had recapitalized the
bank in October.

Rudy further said he was pleased to hear that the Capital
Market Supervisory Agency (Bapepam) had frozen the rights of the
German-based investment firm Deutsche Clearing Bourse AG (DBC) in
the upcoming rights issue.

The ownership of DBC in the bank became controversial last
year following the outbreak of the high profile Bank Bali scandal
in July last year.

DBC had quietly amassed 50.2 percent of Bank Bali without
disclosing the names of the investors behind the investment firm.

Newspaper reports said that Bapepam froze DBC's right on
Tuesday after DBC failed to disclose its investors.

The move could cause DBC's stake in the bank to decrease from
50 percent down to 0.5 percent after the right issue.

Rudy said that DBC had paid nearly Rp 500 billion for its
stake in Bank Bali.

Rudy's family, through PT Sarijaya Wirasentosa, owns 13.93
percent in Bank Bali, with DBC controlling 50.2 percent, Sanwa
Bank Ltd. 8.29 percent and the investing public owning the other
27.5 percent.(bkm)