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Suharto's brother defies order to close bank

Reuters - November 4, 1997

Jim Della-Giacoma, Jakarta – Indonesian President Suharto's half-brother Probosutedjo said he had kept his PT Bank Jakarta open on Tuesday, defying a government order closing down the institution along with 15 other sick banks.

Probosutedjo, chairman of the Bank Jakarta board, said in a statement that he defied the central bank's order on Saturday to shut down the bank for the sake of the small depositors who would not be able to claim their funds through state banks until November 13.

'Pity them, if they don't have cash, they cannot keep going," he was quoted as telling the official Antara news agency.

Hundreds of depositors crowded the Bank Jakarta head office in central Jakarta on Tuesday to take advantage of the opportunity to withdraw up to two million rupiah ($615) from ordinary accounts and five million rupiah ($1,538) from clearing accounts.

The government said on Saturday it had closed down the 16 banks as part of a package of economic reforms sponsored by the International Monetary Fund (IMF) and depositors in these banks would be paid up to 20 billion rupiah per account using government bridge financing.

It said these funds, to be disbursed through state banks, would cover 93.7 percent of the savings of depositors in the liquidated banks.

'It needs to be said again that the funds we are paying out are the result of our own policy and is done without consultation with Bank Indonesia," Probsutedjo said in the statement, which was pasted up at all Bank Jakarta branches and given to reporters.

'We have done this in the interests of the customers of Bank Jakarta, primarily so the life of small businesspeople can go ahead," he said.

'We ask customers to be calm as your money in Bank Jakarta is safe. Bank Jakarta at this moment is fighting in order that the Finance Department review its one-sided decision to liquidate the bank and give permission for Bank Jakarta to re-open," he added.

The official Antara news agency quoted Probosutedjo as saying at the head office on Tuesday that if the review was unsuccessful he would take the government to the state administrative court (PTUN) to have the decision reviewed.

Bambang Trihatmodjo, chairman of PT Bank Andromeda and Suharto's second son, said on Monday he would take Finance Minister Mar'ie Muhammad to the PTUN in an effort to have the decision to liquidate Bank Andromeda overturned.

Suharto's second daughter Siti Hediati Prabowo, who was a eight percent stakeholder in another liquidated bank PT Bank Industri, has yet to announce any plans for a legal challenge.

Antara quoted Probosutedjo as saying he and the bank had assets, such as a share in Jakarta's Le Meridien Hotel, cocoa and rubber plantations, the local assembling franchise for General Motors and other property investments in the capital.

'Remember that Bank Jakarta never caused losses to the government or the community. We are optimistic that this struggle to reactivate the bank will not experience any difficulty," Probosutedjo said in the statement.

'Up to now Bank Jakarta never failed to clear funds, there is also still a balance of tens of billions of rupiah with Bank Indonesia," he said.