Fri, 02 Sep 1994

Two state banks take over management of Kanindo

JAKARTA (JP): A consortium of two state banks, Bank Bumi Daya and Bank Pembangunan Indonesia (Bapindo), has taken over the management of the debt-ridden PT Kanindo Success Textile until it is ready for acquisition by a third party.

"An agreement on the takeover was actually signed by Minister of Finance Mar'ie Muhammad last month," an informed official, who insisted on anonymity, told reporters yesterday.

The official said that under the agreement, BBD's president, Iwan Prawiranata, will coordinate the management takeover.

He declined to elaborate on details of the consortium's plans for settling Kanindo's financial fiasco, which reportedly reached over Rp 500 billion (US$245 million), but said the consortium is now seeking reliable investors to help finance and even take over Kanindo's textile business.

The source added that any investors seriously interested in taking over Kanindo should be consulting with the consortium in order to increase their chances for later approval from the Minister of Finance.

He said that the consortium together with Minister of Industry Tunky Ariwibowo, finance minister Mar'ie, the senior director of Bank Indonesia (the central bank), Hendrobudiyanto, director general of financial institutions of the Ministry of Finance, Bambang Subianto, and director general for development of state companies Martiono Harianto, was considering Gabungan Koperasi Batik Indonesia, Texmaco Group, Johannes Kotjo and Kim Johannes Mulia as possible investors.

Tunky was quoted by Antara as saying after meeting with the consortium and the Minister of Finance on Wednesday that the consortium has thus far not decided which investors are eligible for taking over Kanindo.

"Let us wait and see," Tunky said.

Director General of Tax Fuad Bawazier, who is also a commissioner of BBD, had little to say about the Kanindo case.

"One comment I can make is that investors who will be in a position to take over the textile business will not have to pay a capital gains tax," he said yesterday.

"Even Robby Tjahyadi will not be taxed on the transaction gains," he added.

Criticism

Responding to the Kanindo case, prominent economic analysts recently criticized state banks, from which the chairman of the Kanindo Group Robby Tjahyadi tapped credits for financing his textile project, due to their lack of supervision on the funds provided to Kanindo.

Anwar Nasution, an economics lecturer at the University of Indonesia, earlier blamed the state banks, BBD and Bapindo, because they did not have enough power to force their debtors to honestly report the banks' investment in the Kanindo project.

He said that Kanindo's bad debt showed hidden collusion between officials of the banks and Kanindo.

Rizal Ramli, managing director of the Advisory Group in Economics, Industry and Trade (Econit) told The Jakarta Post that he was convinced that Kanindo's chairman has shifted his credits for financing Kanindo Success Textile's expansion into the property business.

"By doing so, Kanindo has caused irregularities to the banking fund. He should be responsible for the resulting bad debt in the textile business," he added.

Antara reported yesterday that the government has thus far given Gabungan Koperasi Batik Indonesia the green light to become one of the new investors for dealing with the takeover of Kanindo.

"But all things related to the takeover by investors will be officially announced later by the Minister of Finance," the source said.

The legislator BN Marbun meanwhile expressed his pessimism over the possible takeover by the Batik cooperatives association, saying that the association had no experience with exports.

"If the association will finally be allowed to become involved in Kanindo, the financial management including export activities should have been anyway given to other professionals in managing export activities," he reminded.

"I would say that the BBD-Bapindo consortium can take the initiative in hiring professionals to help it manage Kanindo," he said. (fhp/rid)