Standard Chartered named to restructure Bapindo

Standard Chartered named to restructure Bapindo

JAKARTA (JP): The government appointed Standard Chartered Bank (SCB) of Britain to restructure the management of the scandal-hit Bank Pembangunan Indonesia (Bapindo) yesterday, despite opposition from local banking experts.

The British bank will prepare a five-year technical program for the state-owned Bapindo under an agreement signed yesterday by Director General for the Supervision of State Enterprises Martiono Hadianto and R. Douglas Dowie, the chief executive of SCB's Indonesian operation.

Finance Minister Mar'ie Muhammad said that SCB was one of five foreign banks, including Citibank, proposing to provide technical assistance for Bapindo.

"We appointed SCB because they are relatively more prepared than the other four," he told newsmen following the signing of the technical agreement.

The signing of the accord was also witnessed by British Ambassador Graham Burton and Bank Indonesia (central bank) Governor J. Soedradjad Djiwandono.

Mar'ie said SCB's plan to move its Asian training center from Singapore to Jakarta was also another reason for choosing the bank for the advisory job.

"Other state, and even private banks could benefit from SCB's training facilities," he said in an indirect response to the opposition of a number of local banking experts on the technical program.

Setback

The government's plan to invite foreign banks to restructure the management and operation of Bapindo was announced early this year but it was opposed by local banking experts, describing the plan as a setback to the country's banking industry.

Dowie said that SCB, which has been operating in Indonesia for more than 130 years, will set up a team of four professional bankers to conduct "advisory" tasks for Bapindo.

"The team, according to Bapindo's needs, may be enlarged" he told newsmen.

The technical agreement requires SCB to establish general procedures in such fields as lending, internal audit and risk management, Dowie said, strongly denying the possibility of their being engaged in an "executive role."

He refused to elaborate on the fees involved in the deal but stated that financial gain was not the motive.

The finance minister appointed on Thursday Arbali Sukanal K, a former director of the state-owned Bank Bumi Daya (BBD), as the president of Bapindo, under the bank's second reshuffle since the disclosure of a scandal involving unpaid bank debts of over US$430 million in mid-1993.

Eddy Tansil, the prime suspect in the loan scandal, was sentenced to 17 years' imprisonment, while Maman Suparman, a former head of Bapindo's Jakarta branch, was jailed for nine years for his part in the loan scam. Four former Bapindo directors are now being tried by Jakarta courts.(hen)

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