Indover Bank Begs To Differ

We have serious objections to what you wrote about Indover Bank ("Where did the billions go?" Asian Business, Feb. 28). To summarize, you said that in the course of Indonesia's financial crisis, Indover bank has been involved in possibly illegal financial help to Bahana, orchestrated by our shareholder Bank Indonesia.

This is untrue. The only transaction ever between Indover Bank and Bahana regarded a loan of $10 million against normal market conditions, which was rendered to Bahana on Dec. 22, 1995, well before the crisis of 1998 and at a time when Bahana was a sound company. Meanwhile, $5 million was repaid by Bahana on Dec. 22, 1997, to us. The remaining $5 million is outstanding against normal market conditions. The suggestions as supplied by anonymous investment bankers and anonymous Bahana executives are untrue.

It was also stated that Indover is one of the "affiliated parties" of Bank Indonesia's records that purchased Bahana paper. That is not true, either. General Manager D. van Leeuwen refused to answer additional questions concerning Indover Bank's clients citing confidentiality. You will appreciate that a bank has a legal obligation of confidentiality toward its clients.

Indover Bank is independent in its decision-making from Bank Indonesia and is under the supervision of De Nederlandsche Bank (the Dutch central bank) and is complying with all applicable rules and regulations.

Muhamad Muchtar

President Director

Indover Bank


Editor's note: BUSINESS WEEK stands by the facts in the story.

Before it's here, it's on the Bloomberg Terminal.