Rudy Ramli agrees to drop lawsuit
Rudy Ramli agrees to drop lawsuit
JAKARTA (JP): Former controlling owner and president of Bank
Bali Rudy Ramli agreed on Wednesday to drop his lawsuit against
the central bank and the Indonesian Bank Restructuring Agency
(IBRA).
Rudy made the decision after he obtained a guarantee from the
government that the bank would be recapitalized.
"I will drop the lawsuit if I can obtain a guarantee that Bank
Bali will be recapitalized," he told reporters earlier before he
entered a meeting with Bank Indonesia and IBRA officials at the
central bank.
Rudy declined to provide further comments after the meeting,
but said that he had been assured that Bank Bali would be
recapitalized.
"There's no need for a legal battle. We need to cooperate to
have Bank Bali recapitalized," he said briefly.
Meanwhile, Bank Indonesia deputy governor Subarjo Joyosumarto
said after the meeting that the Bank Bali recapitalization
program was expected to be completed before the end of May.
He said that the bank would have to go through another due
diligence process if the recapitalization program was not
completed by the end of next month.
IBRA, a unit of the finance ministry, nationalized Bank Bali
in late July after the Ramli family failed to provide financing
to recapitalize the bank or to invite foreign investors to help
the financing.
The agency was supposed to have recapitalized the bank last
year but the program was delayed after the bank was hit by a high
profile scandal involving senior government officials and
politicians.
Rudy latter filed a lawsuit against the nationalization of his
bank by the central bank and IBRA.
The Jakarta Administrative Court last month surprisingly ruled
that the takeover of Bank Bali was illegal.
The central bank has since vowed to make an appeal against the
ruling.
"Bank Indonesia, IBRA, and Rudy Ramli have agreed to drop the
lawsuit. We have agreed to recapitalize Bank Bali," said IBRA
senior deputy chairman Arwin Rasyid following the same meeting at
the central bank.
Arwin said that the decision to recapitalize Bank Bali was
also supported by the Financial Sector Policy Committee, which
groups several senior economics ministers.
Arwin said that the government decided to recapitalize Bank
Bali because it was a good bank with extensive networks and more
than 6,000 employees.
The government earlier demanded that Rudy drop his lawsuit as
a prerequisite for the recapitalization of Bank Bali.
Bank Bali will need about Rp 4.7 trillion (US$587 million) in
recapitalization funds to boost its capital adequacy ratio (CAR)
to at least 4 percent, the minimum required level set by the
banking authority.
Meanwhile, Subarjo said that IBRA would "return" Bank Central
Asia's (BCA) supervision to Bank Indonesia on Thursday because
the bank had turned healthy.
Based on the bank restructuring program, ailing banks are put
under IBRA's management and supervision while sound ones fall
under the central bank's supervision until a completely new
banking supervisory agency is set up sometime in 2001.
"BCA is now healthy and in good condition, so starting on
Thursday the bank will be under the supervision of Bank Indonesia
again," Subarjo said.
IBRA, which owns 98 percent of BCA, plans to sell between 15
percent and 30 percent of the bank through an initial public
offering next month.
The bank booked a net profit of about Rp 641.29 billion in
1999 compared to a loss of some Rp 28.40 trillion in 1998.
IBRA is slated to start an overseas roadshow (promotion) on
Thursday, covering Singapore, Hong Kong, New York and London.
(rei)