President accused of nepotism in BNI hire

Agustina Wayansari , The Jakarta Post , Jakarta | Fri, 02/08/2008 12:28 PM | Headlines

The government has named Gatot M. Suwondo president director of state-owned Bank Negara Indonesia (BNI), the country's third largest lender.

GATOT M. SUWONDO

A career banker who has been BNI's deputy president director since 2005, Gatot's appointment on Wednesday nevertheless drew accusations of nepotism from lawmakers, as Gatot is a brother-in-law of the country's First Lady, Ani Yudhoyono.

Senior lawmaker from the Democratic Party of Struggle (PDI-P) Max Moein said that it was a clear case of nepotism as judging from his career, Gatot lacked the experience to handle one of the nation's biggest banks, which has total assets of more than Rp 186 trillion (US$19.8 billion).

"Well, he might be a former deputy president director (of BNI), but it was not for so long. His experience as a director at the Danamon Syariah Bank is also inadequate as (the bank) only manages a small asset of around Rp 1.5 trillion," he told The Jakarta Post on Thursday.

"These banks are at very different levels. Sigit Pramono (whom Gatot replaces), had adequate experience with his post at Bank International Indonesia (BII) before being appointed as BNI president director."

Max said that former president director of Bank Danamon Arwin Rasjid would have been a better choice for the position, having managed a large bank with assets of more than Rp 100 trillion.

Moreover, the decision to replace Sigit came after reports that the government has not been satisfied with the bank's performance despite the significant in its profit last year.

Sigit has said that BNI's unaudited net profit in 2007 had risen 20.2 percent to Rp 2.32 trillion from a year earlier.

BNI's outstanding loans grew by 32 percent last year to Rp 88 trillion, while the net NPL ratio declined to 3.7 percent from 6.55 percent previously.

Another lawmaker, Hasto Kristianto, agreed with Max, saying: "This shows a perfect practice of nepotism, although the government seems to have wrapped it up rather nicely by putting first Gatot in a transition post as the deputy president director in mid-2005."

He said he suspected the appointment of Gatot was part of a "mobilization" involving placing people close to the President in strategic positions such as at state firms, in anticipation of next year's general elections.

However, State Minister for State Enterprises Sofyan Djalil rejected the accusations of nepotism, insisting the appointment of Gatot was entirely based on his personal capacity as a banker, and had nothing to do with his close relationship with the President.

"He had assumed posts as director and deputy president director at BNI before (Wednesday's appointment). That should say a lot about his capability."

The shareholders' meeting also named Felia Salim as deputy president director.

Former chairman of for the Corruption Eradication Commission Erry Riyana Hardjapamekas was made president commissioner, Suwarsono his deputy, and Achjar Iljas, HMS Latif, Parikesit Suprapto, Achil Ridwan Djajadiningrat, and Fero Poerbonegoro became members.

Gatot's banking career:

Feb. 6, 2008 : President director BNI
May 19, 2005-2008 : Deputy president director BNI
2001-2005 : Director of Bank Danamon sharia unit
1999-2001 : Group head credit restructuring at Bank Duta
1998-1999 : Group head corporate and merchant banking at Bank Duta

Gatot's Education

1982 : Master of Business Administration from International University, Manila
1979 : Mindanao State University, Marawi City, Philippines

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