Thursday, March 04, 2010

Shall we close down Mutiara (Century)?

The House of Representatives (DPR) has finally concluded that the disbursement of short-term financing facility (FPJP from Bank Indonesia) and capital injection of Rp6.7 trillion into Bank Century (now Mutiara) were illegal. The question, should LPS pull out the funds from Bank Mutiara?
Pulling out the funds from Mutiara would mean closing down the bank, unless someone want to purchase the bank and inject huge amount of funds, right?
For sure, that's not one of the recommendations provided by DPR. But if the bailout was wrong and considered illegal, what is the status of the funds in Mutiara? Or we could raise a different question, if the funds in Mutiara will be kept (as a result of a bailout policy), can we say the bailout illegal? A friend said "that's a stupid question." Probably lawyers could provide better answer...




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