Business

House urged to intervene
in DBS’s plan to acquire
Danamon

Golkar Party lawmaker Lili Asdjudiredja has called on the House of Representatives to urge Bank Indonesia and the government to prevent Singaporean DBS Bank from acquiring 99 percent of Bank Danamon’s shares as it would create a banking monopoly.

Both banks are owned by Temasek Holdings, the Singaporean sovereign wealth fund fully controlled by the island-city government.“Even if the deal on Danamon’s acquisition has already been made, it must be annulled because it will affect Indonesia’s banking sector and Danamon’s domestic priority customers,” he said.

Lili, also a businessman, said that if Danamon wanted to sell its shares, it should comply with the Indonesian Banking Law by first offering its shares to other shareholders outside the majority ones.

“If they [other shareholders] are not interested, Danamon could offer its shares to third parties, including DBS. In this case, DBS is a third party and outsider even though it is owned by Temasek Holdings,” he said.

He warned that if the plan was not cancelled, it would strengthen foreign (i.e. Singaporean) ownership in Danamon and go beyond the central bank’s regulation on a single presence.

According to him, the deal had not been conducted transparently because the central bank had not been informed of it despite Danamon being publicly listed.

Lili who chaired the House’s special committee assigned to investigate the Bank Bali scandal in 1999, accused Temasek of creating a monopoly by using the transitional period in the bank’s supervision from the central bank to the newly established Financial Service Authority (OJK).

Lili also told BI to meet with the Singaporean financial service authority to reach a mutual understanding in implementing the reciprocal principle, since Indonesian banks are currently denied the right to acquire Singaporean banks and to establish branch offices in the country.

DBS has prepared S$9.1 billion (US$7.2 billion) to buy 99 percent of Bank Danamon, with the aim of creating Indonesia’s fifth-largest lender by assets. (nvn)

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