![]() ![]() Bank Mutiara’s high bailout price has often been blamed as the main reason behind the failure. The LPS Law stipulates that all shares of any bank it rescues must be sold at their purchase price within three years of the rescue, although the sale may be extended by a maximum of two times, with each extension lasting for one year.īut the LPS had failed to find any suitable buyer as of August, forcing it to put the bank up for auction next year. Currently, the deposit agency holds a 99.9 percent stake in the bank. The LPS rescued Bank Mutiara in 2008 through a controversial, legally complex bailout, which saw the agency spend Rp 6.7 trillion. Outgoing LPS executive chairman Mirza Adityaswara, who was recently elected BI’s senior deputy governor, said separately that the LPS was currently preparing mechanisms for next year’s sale. I’m worried that the LPS may be held liable if Mutiara’s sale does not go ahead as required by law,” he said during the same seminar. ![]() “True, it is hard to predict the political implication of the sale, but the bickering and criminal proceedings will still continue after the bank is sold. In agreement with Darmin, former finance minister Bambang Sudibyo said the LPS should complete the Bank Mutiara divestment process as scheduled, without considering the political debates or allegedly criminal aspects of the bailout. However, he added that the LPS had to create a separate set of technical regulations as legal derivatives to prevent a possible public outcry. “The law clearly says that the LPS must sell any bank that has been rescued in the sixth year at its best price, regardless of its bailout price,” he said during an LPS seminar on bank resolution on Tuesday. The sale of Bank Mutiara, formerly known as Bank Century, must go ahead as planned despite accusations that it will result in state losses, experts say.įormer Bank Indonesia (BI) governor Darmin Nasution said the sale process should proceed as mandated by the 2004 Insurance Deposit Agency (LPS) Law, although the state may lose money as the bank would be sold for less than its bailout figure of Rp 6.7 trillion (US$580.84 million). ![]()
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