"Unsound phenomenon can now be observed from foreign investors who are willing to involve in national banks," Hikmahanto, a professor of international law at the University of Indonesia, said.
Jakarta (ANTARA News) - Bank Indonesia (BI/the central bank) in its capacity as bank regulator must act if a foreign investor is intending to take over a national bank illegally, international law observer Hikmahanto Juwano said.

"Unsound phenomenon can now be observed from foreign investors who are willing to involve in national banks," Hikmahanto, a professor of international law at the University of Indonesia, said here on Tuesday.

He said that BI must take such an action because there was now a trend to that end. A bank owned by a national investor is gradually to be taken over by a foreign investor who bought its shares through the stock exchange.

At the beginning, the foreign investor purchased the bank`s shares to the volume allowed by regulation and not as a majority share holder as both sides had agreed.

However, secretly the foreign investor purchased additional shares of the bank at the stock exchange, he said.

Thus, the volumes of shares the foreign investor had bought made it as the majority share holder.

He said that the foreign investor had become the majority stake holder, even if both sides had not agreed it in the first place.

Hikmahanto said BI must be firm in the face of such a case. It may not be weak against foreign investors and forget its duty to protect the interest of national stake holders.

Of course, he said, BI should not be allergic against foreign capital in reinforcing national banks. But BI should not tolerate foreign investors who control national bank market through illegal practices.

BI as a regulator and as a referee must act so that national banks could grow healthily with guaranteed legal certainty, he said.

Earlier, economic analyst Aviliani said the presence of foreign investors at national banks was not something that was scary.

But foreign ownership of national banks` stake should be regulated to give priority to national economy.

She said that Indonesia was not an anti-foreign investment country. Moreover, it needed foreign investment to boost its economic growth.

Therefore, she agreed that the presence of foreign investment, particularly in the acquisition sector, should be regulated.

BI has regulated foreign ownership at national banks through its circular on BI Regulations (PBI). Based on the circular, foreign investors can own more than 40 percent of a national bank capital after December 31, 2013.(*)

Editor: Heru Purwanto
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