|
Standard drops Bali bid
|
 |
December 16, 1999: 9:18 a.m. ET
U.K. bank pulls out of Indonesian bank deal after staff protests; may return
|
LONDON (CNNfn) - The decision by Britain’s Standard Chartered Bank to drop its planned investment in Indonesia’s troubled PT Bank Bali threatens to derail restructuring of the country’s financial sector, analysts warned Thursday.
Bank Bali had been viewed as one of Indonesia’s best-managed institutions before revelations that its former owners had siphoned almost $80 million to the Golkar political party, which lost power earlier this year.
Standard Chartered agreed in April to manage the bank on behalf of a government agency and signed up to a recapitalization deal, agreeing to pay $56 million for a 20 percent stake.
Standard said it may still make a bid at a later date, but analysts warned that the country’s restructuring timetable was set to slip.
"Foreign investors will now think twice before investing their money here,” Laksono Widodo, head of research at ING Barings Securities told Reuters. "It is also quite a major setback to the whole bank restructuring program.”
Standard said its position had become "untenable” after violent demonstrations by Bank Bali staff against Standard executives.
Demonstrators claimed that Standard was colluding with the government to unseat the Ramli family, which founded the bank and remains its largest shareholder. "[Our] staff have been put under intense personal pressure,” said Standard in a statement.
Analysts said any new investor in Bank Bali would seek a sharp discount on the price Standard Chartered had been prepared to pay, which could delay the bank's recapitalization at least three months.
Standard Chartered (STAN) shares were slightly down at Thursday’s midsession at 922 pence, giving up an earlier gain of as much as 1.6 percent. 
-- from staff and wire reports
|
|
|
|
|
 |
|
