Thu, 26 Feb 2004

Swissasia retains Bank Lippo management

Leony Aurora, The Jakarta Post, Jakarta

Swissasia Global, the new controlling owner of publicly listed Bank Lippo, has decided in an extraordinary shareholders meeting to retain Joseph Luhukay as president and Mochtar Riady as chairman of the board of commissioners.

The meeting was held on Wednesday, hours after the Indonesian Bank Restructuring Agency (IBRA) and Swissasia signed the sales and purchase agreement (SPA) for a 52.02 percent stake valued at Rp 1.205 trillion (US$142.7 million), making the foreign consortium the majority shareholder of the country's 11th largest bank by assets.

Rainer Silhavy, regional general manager of Austria's Raiffeisen Zentralbank Osterreich AG (RZB), which leads the consortium along with Swissfirst Bank AG, was appointed vice chairman of the board.

Other investors involved in the consortium are fund managers Matrix Asia Holding Ltd., ASM Investment Ltd. and Ferrell Opportunity Capital Ltd.

In a written statement, Silhavy said Swissasia had specifically asked Mochtar to remain chairman of the board.

"Swissasia recognizes that the founding fathers of the bank have a history of success in building banks in this country," he said.

The Riady family founded and was the former majority shareholder of Bank Lippo. IBRA, a government agency, acquired a majority stake in the bank after it injected around Rp 3.75 trillion in bonds to bail out the bank from the devastating impact of the 1997-98 financial crisis. The agency sold the controlling stake to private investors to raise cash and help finance the state budget deficit.

Other retained commissioners are I Nyoman Tjager, Djisman Simanjuntak -- rector of the Prasetya Mulya Business School -- and Roy Edu Tirtadji, a long-time associate of Mochtar.

New commissioners are Jan Cherim of ING, James Ng, a Hong Kong banker, and Chris Williams, an attorney from Richard Butler Hong Kong.

As for the board of directors, new faces include Lee Heok Seng of RZB and Mark McKenny of ING.

Their appointments are not yet effective, pending a fit and proper test by Bank Indonesia.

For the 2004 to 2006 period, Swissasia aims to focus on promoting transparency, good corporate governance and risk management, as well as expanding services, especially consumer and small- and medium-enterprise banking, said Silhavy.

With the switch in ownership, IBRA now holds a mere 2.88 percent stake in Bank Lippo, while public investors own 35.5 percent and Lippo E-Net, controlled by the Riady family, 9.6 percent.

Bank Lippo, with assets of Rp 22.4 trillion, has 379 branches across Indonesia and employs some 6,000 people.