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Suharto's son offered deal for closed bank

Agence France Presse - November 12, 1997

Jakarta – Mr Bambang Trihatmodjo, the second son of President Suharto, will take control of Bank Victoria as compensation for the closure of his Bank Andromeda, Bisnis Indonesia said.

The paper said he wanted to take over Bank Victoria last April, but had been refused permission to do so until now. In June, Bank Victoria had assets of 114 billion rupiah (S$51 million) and outstanding loans of 111 billion rupiah.

The report cited an unnamed source as saying that Finance Minister Mar'ie Muhammad may approve the acquisition as compensation for the closure of Bank Andromeda, in which Mr Bambang has a 25 per cent stake.

The report came as Mr Probosutejo, a half-brother of Mr Suharto, confirmed yesterday that he had filed a legal suit against Mr Mar'ie for closing down the bank.

Mr Mar'ie and Bank Indonesia Governor Sudrajad Jiwandono on Nov 1 ordered the closure of 16 banks, including Bank Jakarta and Bank Andromeda, as part of an effort supervised by the International Monetary Fund (IMF) to restore the health of the country's financial sector. Mr Probosutejo and Mr Bambang have challenged the move.

The former said the suit was filed on Friday against Mr Mar'ie for ordering the liquidation of Bank Jakarta.

"Because the licence revocation and the liquidation by Bank Indonesia is not related to the conditions of Bank Jakarta, Bank Jakarta is forced to file a suit against the Finance Minister," he told a press conference here yesterday. "In terms of diseases, Bank Jakarta was only suffering from a cold ... and therefore Bank Jakarta should not have been killed," he said, noting also that unlike several other banks, Bank Jakarta had never sought financial assistance from the central bank.

He alleged that the bank was closed down because he and the management of the bank did not have a cosy ties with central bank officials. Mr Mar'ie told a parliamentary session on Monday that the government was prepared to face the consequences of its decision and said that those "who feel adversely affected" by the liquidations could take legal action.

The Jakarta Administrative Court is due on Wednesday to hold a hearing about a possible trial against Mr Mar'ie and Mr Sudrajad after a suit filed by Bank Andromeda.

Meanwhile, IMF managing director Michel Camdessus arrived in Indonesia yesterday for a two-day visit, expressing admiration for its "courageous" economic reform plan.

"It will be difficult, but I am personally confident that if implemented correctly, it will put the Indonesian economy back on a very good track with even more sustainable growth," he told reporters.

The IMF last month announced an international aid package for Indonesia of nearly US$40 billion (S$62 billion) to help it overcome its economic and monetary crisis.