Salim won't bid BCA: Laksamana

Berni K. Moestafa, The Jakarta Post, Jakarta

Business tycoon Anthony Salim told the government that the Salim Group would not attempt to regain control of the bank it once owned, Bank Central Asia (BCA), giving his word to State Minister of State Enterprises Laksamana Sukardi.

Laksamana said on Tuesday that he told Salim right from the onset of launching BCA's sale not to join the bidding process.

"I called up Salim and told him not to join. He answered he would comply with the government," Laksamana told reporters after a coordinating meeting between economic ministers.

When asked whether Salim had given any assurance to convince the government, Laksamana said that Salim had given only his word.

"As a minister, I guarantee that Salim will not buy back BCA," he added.

Suspicion has surfaced that the giant Salim business group was among the bidders vying for a 51 percent stake in BCA.

Once the largest private bank, BCA is currently on sale by the Indonesian Bank Restructuring Agency (IBRA), which took over the bank after bailing it out from the 1997 financial crisis.

Until Salim repays its debts to the government, the group may not regain control over BCA.

Founded by Soedono Salim, the father of Anthony Salim, BCA is one of IBRA's most precious assets. BCA ranks first among the local retail banks, partly thanks to its wide network of branch offices and ATMs across the country.

The government has made it clear numerous times that it wanted only reputable buyers gaining management control over the bank.

But since first launched in 2000, BCA's sale has been delayed three times in part due to political interference.

On the last attempt, only two final bidders emerged, one of which was rumored to be acting on behalf of Salim. IBRA called off the bidding process, citing low bids.

Now BCA's sale has become a test case for the government to push ahead with key asset disposals despite local complications.

But, six out of the eight bidders for BCA, have to prove that they had no links to the Salim Group.

Given that the government has apparently failed in another litmus test to sell cement maker PT Semen Gresik to Mexico's Cemex SA de CV, its credibility in selling other state assets hinges much on the success of BCA's sale.

The government is expecting to secure Rp 6.5 trillion from the sales of state companies this year. It will target another Rp 8.4 trillion from IBRA asset sales. The proceeds are necessary to help cover this year's state budget deficit.