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apanese holding company J Trust has officially taken over 99 percent ownership of Bank Mutiara, formerly known as Bank Century, from Indonesia'€™s Deposit Insurance Corporation (LPS) following an extraordinary general shareholders meeting held on Thursday.

During the meeting, the LPS '€” as the majority shareholder of Mutiara '€” approved J Trust'€™s acquisition of the bank, which was worth Rp 4.41 trillion (US$362.63 million) and was 3.5 times of Mutiara'€™s price-to-book value (PBV).

The meeting also saw the appointment of Nobiru Adachi, J Trust'€™s representative director and senior managing director, as commissioner of Mutiara and dismissed Gandhi Ganda Putra as its president director.

As previously reported, J Trust was announced the final bidder in the auction of Bank Mutiara. The auction completion came close to the deadline set for Mutiara'€™s divestment, as required by the LPS Law.

The law stipulates that a bank rescued by the LPS must be sold within six years of its bailout. In Mutiara'€™s case, the deadline was Nov. 21, 2014.

The LPS tried to sell the bank between 2011 and 2013, but to no avail. It then put Mutiara on auction early this year, eventually attracting several potential investors, including state-owned Bank Rakyat Indonesia (BRI).

LPS executive director Kartika '€œTiko'€ Wirjoatmodjo acknowledged that the auction price was far below the funds that the LPS had spent to rescue Mutiara.

It spent Rp 6.76 trillion when it rescued the bank during the 2008 bailout and it injected another Rp 1.25 trillion in 2013 to improve Mutiara'€™s capital, so that it could comply with a Bank Indonesia (BI) regulation on minimum capital.

'€œHowever, it [the auction price] generated the highest recovery rate compared to what was recorded in previous bailouts. The recovery rate for Mutiara is above 50 percent,'€ he told reporters after the shareholders meeting.

As a comparison, the recovery rate of Bank Central Asia (BCA) stood at 21 percent when it was rescued in 1998.

Tiko added that he hoped J Trust would soon find a new shareholder for the remaining 0.996 percent shares of Mutiara that was still controlled by the LPS.

It could not transfer its entire stakes, which amounted to 99.996 percent, to J trust because a government regulation on foreign ownership in the banking industry issued in 1999 stipulates that foreign shareholders can only control a maximum 99 percent stake in a bank.

Meanwhile, according to Adachi, J Trust is looking to increase Mutiara'€™s lending in micro, small and medium enterprise (MSME) services for the next five years.

'€œWith Indonesia'€™s population of 250 million, we have good business potential. We already have the expertise from our operations in Japan,'€ he said.

In Japan, J Trust currently manages several business segments, comprising financial, international, real estate, amusement and others.

Data from Mutiara shows that its outstanding loans stood at Rp 7.81 trillion as of September. Less than 10 percent of the figure was channeled to the MSME segment.

Adachi added that J Trust would hold talks with Indonesia'€™s Financial Services Authority (OJK) about the possibility of resuming Mutiara'€™s share trading activity on the Indonesia Stock Exchange (IDX).

At present, 0.004 percent of Mutiara'€™s shares are still held by the investing public, even though the share trading has been suspended since the bailout.

'€” JP/Tassia Sipahutar