Loud and clear: Employees of state lender Bank Tabungan Negara (BTN) stage a protest in Pekanbaru, Riau, on Wednesday against Bank Mandiriâs plan to acquire the smallest state-owned bank
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The government has issued a circular demanding the postponement of Bank Mandiri's plan to takeover Bank Tabungan Negara (BTN), both being state lenders, because the plan has stirred controversy.
Cabinet Secretary Dipo Alam said controversies over the acquisition plan are not necessary ahead of the July 9 presidential election.
BTN employees recently staged a rally at their office in opposition to the plan, but State-Owned Enterprises Minister Dahlan Iskan was undeterred, saying the acquisition would benefit Mandiri and BTN as well as the whole nation.
In another surprising revelation, Coordinating Economic Minister Hatta Rajasa said recently he had never been informed of the acquisition plan.
On Wednesday, Dipo issued the circular and sent it to Dahlan, Hatta, Finance Minister Chatib Basri as well as Budi Gunadi Sadikin and Maryono, the president directors of Mandiri and BTN, respectively.
'The plan to transfer BTN shares to Mandiri ' potentially causing public concern in general and employee concern ' is to be postponed until there is comprehensive clarity on the plan,' Dipo told a press conference on Wednesday.
'And we also hope that all employees and those from BTN understand our letter,' he added.
Fearing major layoffs, thousands of BTN employees staged a rally on Sunday in opposition of the acquisition plan.
They said the takeover would only favor Mandiri, the country's largest bank by assets. A takeover would also threaten the government subsidized mortgage program, which had always been carried out by BTN for its low- to middle-income customers.
In his letter, Dipo also told related officials to follow the existing guidelines on the mechanism to transfer government shares and to comprehensively assess the plan.
Dipo also sent circulars to all ministers and heads of government offices, telling them not to issue any controversial policies before consulting with the President or the Vice President.
He said controversial policies could create public unrest ahead of the presidential election.
Dipo said the circular was in line with President Susilo Bambang Yudhoyono's instructions during Cabinet meetings on Jan. 5 and 16.
'I believe it's already clear that things should be done in line with the existing regulations,' he added.
The circular needed to be issued following controversies in the Mandiri-BTN case.
Dahlan said Mandiri's acquisition of BTN would help boost BTN's capacity in providing mortgages ' a task BTN could not complete on its own due to its limited loans even compared to those provided by banks whose main products did not include mortgages.
Dahlan also said that the acquisition would position the bank as one of the top three in ASEAN.
Bank Mandiri is worth Rp 733.1 trillion and BTN Rp 131.17 trillion.
However, on Tuesday, Minister Hatta said he had yet to receive reports from Dahlan regarding the planned acquisition.
Harry Azhar Azis, deputy head of the House of Representatives Commission XI overseeing finance and also a Golkar Party politician, also said Dahlan should fully understand the regulations on share transfers.
According to Harry, the transfer of shares at a state-owned company needed to be discussed by a privatization committee consisting of the coordinating economic minister, finance minister and state-owned enterprises minister, led by the President.
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