GOVERNMENT'S PLAN ON BTN ACQUISITION BY MANDIRI TRIGGERS CONTROVERSY by Fardah

    Jakarta, April 22, 2014 (Antara) - Some 1,000 employees protested outside the Bank Tabungan Negara (BTN) headquarters in central Jakarta on April 20 to oppose the government's plan to sell its stake in BTN to fellow state lender Bank Mandiri.

         "Reject the acquisition of BTN. Return BTN to the people because it belongs to them," Chairman of BTN's labor union Satya Wijayantara said during the rally. The employees had staged a rally wearing black uniforms and headbands saying "Reject the Acquisition of BTN."

    The workers also carried banners saying "BTN is not for sale" and "Don't make BTN a political commodity". Satya said BTN employees will continue protests until the takeover plan is cancelled.

         State Enterprises (BUMN) Minister Dahlan Iskan on Monday, April 21, said he will continue to make efforts for the realization of the acquisition of the PT Bank BTN by the PT Bank Mandiri, despite challenges from various quarters.

         Dahlan Iskan previously said Bank Mandiri was ready to takeover BTN. "Bank Mandiri is ready and has the capacity to take over BTN, which will later be made into its subsidiary to handle housing solutions for the people," he said after a board meeting with his ministry on April 17.

         The acquisition is expected to be decided during a special meeting of BTN shareholders on May 21.

         The plan is to help BTN, which is no longer capable of meeting public demand for housing, he said, explaining the reasons for the BTN acquisition plan. "Frankly speaking, housing needs have now reached 1.5 million units a year. BTN is unable to meet it," he said.

         Also, BTN will be made into the biggest bank for housing finance in the country and the takeover is aimed to make Bank Mandiri the biggest bank in the ASEAN region. He pointed out that if the acquisition of BTN was realized, Bank Mandiri will become larger than Malaysian and Thai banks in the ASEAN. Only the Singapore bank will be larger than the entity.

         "BTN must grow in size. It is not impossible that those who object to the acquisition do not have a clear concept of the acquisition and the roadmap in the field," he said.

         Dahlan admitted he cannot make the decision about it by himself because of regulations.

         "However, if other parties objected to the plan, I, as a state enterprises minister, had designed a clear plan and roadmap for it for the progress of the country in the field," he said.

         The chairman of House Commission XI, Harry Azhar, had previously asked the minister to be careful before making a decision on the BTN acquisition because he can potentially violate the law.

         "The minister must understand about share transfer rules and be careful about it, and he must not insist on advancing the plan to later only violate the law and face a jail term," he said.

         Harry said taking over a state-owned company's shares must be done through the Privatization Committee, which is headed by the President with members consisting of coordinating minister for economic affairs, finance minister and state enterprises minister.

         "Only after all members of the committee, including the President, agreed can the plan be referred to the House of Representatives for an approval," he said.

         Opposition was also voiced by economic observer and former chief economics minister Rizal Ramli who supported the BTN workers during the Sunday rally. 
    "There is no reason to hand over BTN to Bank Mandiri. It is only a scenario set for the interest of a certain group," Rizal Ramli said while questioning the motive prompting the takeover plan.

         "In the past few years, Bank Mandiri saw its performance decline and was left behind by fellow state lender Bank BRI. So if it plans to expand its business it must acquire a private bank rather than a state bank," he said.

         The BTN acquisition plan was also considered as highly risky by banking observer Deni Daruri. It is risky to force the plan on the two state lenders as they have different core businesses, Deni said.

         It will be best for the government to plan a merger between Bank Mandiri and Bank Negara Indonesia (BNI) and let BTN to be taken over by Bank Rakyat Indonesia (BRI), he suggested. 
    Deni, who is also a leading banker, said the merger should be between banks with similar characteristics.

         He regretted the reasons given for the merger plan by Minister for State Enterprises Dahkan Iskan. "If the idea is to create a big bank, Bank Mandiri should acquire BNI or BNI takes over Bank Mandiri then Indonesia will have a powerful anchor bank," Deni said. 
    It will not give significant additional strength to Bank Mandiri if it acquires BTN, he said, adding, on the contrary, BTN may no long carry out its function as the financier of low-cost houses.

         "The process of acquisition is a policy of the government, but the policy will not work if a decision is made unilaterally," he said
    BTN President Director Maryono on April 15 said the government will arrive at a decision on whether to dispose its stake in BTN when the state lender holds an extraordinary general shareholders meeting on May 21.

         "We have received a letter from the deputy for financial services to the state enterprises minister. We will leave the matter entirely to the shareholders to decide," Maryono, former president director of Bank Century (now Bank Mutiara), said.

         In 2013, BTN posted a net profit of Rp1.56 trillion, a 14.53 percent increase from Rp1.36 trillion in 2012. The bank distributed Rp100.46 trillion in credits last year, up 23.41 percent from Rp81.41 trillion reported in the previous year.

         The Financial Service Authority (OJK), meanwhile, said it was still studying the mechanism for the planned acquisition.

         "The corporate action must promote the health of financial industry in Indonesia with regard to meeting the ASEAN Economic Community," OJK chief commissioner Muliaman D Hadad stated on April 17.

         The Indonesian Chamber of Commerce and Industry (Kadin) appealed to the government to postpone its plan to sell its stake in BTN.

         "The planned acquisition of BTN must be postponed. As a bank whose core business is financing home loans, BTN has a clear role," Kadin Deputy Chairman for Regional Empowerment Natsir Mansyur stated in a press statement on April 21.

         Natsir claimed that BTN's role in promoting the housing sector had an extensive impact on the regional and national economies. The bank had financed the construction of an estimated 15 million units of low-cost houses across the country.

         "BTN is the most prepared bank (in the housing sector). Is Mandiri ready to do that? The house construction projects involve many regional businessmen living outside Jakarta. Therefore, the projects have a far-reaching impact on the regional economy," he asserted.

         He called on Minister Dahlan to allow state banks to focus on their businesses, including in the housing, industrial, maritime, infrastructure and agribusiness sectors.

         In response to those criticisms, Dahlan said he will receive anybody, including BTN's employees who oppose his plan on the BTN acquisition by state PT Bank Mandiri.

         "Anyone, who wants to convey his aspiration or objection to the plan, please come to my office on the 19th floor of the BUMN Ministry building," the minister said on April 22.

         BTN will still exist as a business entity of Bank Mandiri, he said in response to rallies staged by BTN's employees to protest the plan.

         "Nothing will change, the company will still exist. In other words, BTN will operate normally, only its share ownership will change," he noted.

         After the taking over of BTN by Bank Mandiri, none of BTN's employees will be laid off, in fact, their welfare will improve, he added.

         "So, I urge BTN employees not to worry, because the company will operate normally," he stated. ***2***
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(T.F001/A/BESSR/Bustanuddin) 22-04-2014 23:16:57