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Suharto son escalates attack on bank closure

Dow Jones News Service - November 4, 1997

Jakarta – Bambang Trihatmodjo, the middle son of Indonesian President Suharto, stepped up his attack on Indonesian Finance Minister Mar'ie Muhammad Tuesday over the liquidation of a bank of which he is a major shareholder.

Citing the 'smearing of the Suharto name' and a politically-motivated plan against the President himself by Mar'ie, Bambang said that he would take legal action against the Finance Minister following the liquidation of PT Bank Andromeda last Saturday.

The liquidation is part of a wider clean-up of Indonesia's financial sector, agreed to under the $33 billion International Monetary Fund assistance package announced last week. In addition to Bank Andromeda, 15 other Indonesian commercial banks were liquidated Saturday.

'I see the liquidation as a move to ruin the reputation of my family and indirectly to disgrace Bapak (President Suharto), so that he will not be re-elected as President,' Bambang said following a meeting of Indonesia's parliament.

Bambang reiterated a threat he made Monday to take legal action against Mar'ie, but said he was still seeking advice from his lawyers over whether his case could be brought before an Indonesia court.

'I will face Mar'ie and any of his supporters, if it's proved to be a political move (against the Suharto family),' Bambang said.

Bambang also said that he didn't believe his father knew that his bank was on a list of those to be liquidated. He added that his five siblings stood behind him on this matter.

Bambang isn't the only Suharto family member fuming over the bank liquidations.

Probosutedjo, Suharto's half-brother, also claims that his bank, PT Bank Jakarta, was unfairly closed by government authorities. On Tuesday he also stated a government decree barring overseas travel for shareholders of the liquidated banks, violated his 'human rights.'

A third Suharto family member, middle daughter Siti Hediati Prabowo, also was a shareholder in a liquidated bank: PT Bank Industri. She, however, hasn't made any public comments about her bank's closure.

While some Jakarta analysts have brushed off the comments by Bambang and Probosutedjo, others are fearful that such politically powerful forces could stand in the way of an effective implementation of the IMF assistance package.

Bank Andromeda and Bank Jakarta are two financial institutions that analysts say have been in trouble for years. Bank Andromeda executives themselves have acknowledged the bank has breached Indonesia's legal lending limit.

Concern exists that if moves against financially-troubles banks such as these meets stiff political opposition, deeper and more complex reform could be doomed.