State banks criticized for failure to salvage Kanindo

State banks criticized for failure to salvage Kanindo

JAKARTA (JP): Economists yesterday criticized state banks for
having failed to salvage the debt-ridden textile manufacturer PT
Kanindo Success Textile prior to the emergence of its financial
difficulties.

"The failure indicates that the creditor banks have no good
loan supervision mechanisms," economist Anwar Nasution told a
one-day seminar on the new tax bill yesterday.

"I would say that the state banks should be more responsible
for the non-performance debt of Kanindo, considering that the
banks should have made examinations prior to the financial
crisis," he said.

"I cannot imagine why the banks did not take strict measures
against Kanindo's management when they found that the company was
facing a financial fiasco," he said.

The state banks Bapindo and Bank Bumi Daya are reportedly
among the creditors of Kanindo's business.

"With Kanindo's bad debt, the public may think about the
possibility of collusion between the executives of the banks and
Kanindo," Anwar said.

Sjahrir, who chaired yesterday's seminar, said that the banks
should be held responsible because they were aware of Kanindo's
financial problems.

The company was reportedly acquired by the Texmaco Group and
the Association of Indonesian Batik Cooperatives (GKBI), but an
industrial source said this week that Johannes Kotjo, a former
executive of the Salim Group, is likely to take over the company.

The chairman of the economic and trade consulting company
Econit, Rizal Ramli, said yesterday that any companies trying to
salvage Kanindo should not use funds from state banks.

He said that using new loans from state banks to salvage
Kanindo's operations may create another problem.

Minister of Finance said this week that state companies were
not allowed to get involved in helping revive Kanindo.

Ramli expressed concern that Robby Tjahjadi, chairman of the
Kanindo Group, has disappeared. "I have been informed that a Bank
Bumi Daya director went to meet with Robby in Singapore." (fhp)