Investment Bks Get $45M For Advice In Indon - Review (fwd)

[Robert Weissman <rob@essential.org>]

Dow Jones News Service
06/02/1999
Investment Bks Get $45M For Advice In Indonesia - Review
JAKARTA (Dow Jones)--Four investment banks have received a total of $45
million from the Indonesian government for assistance in rebuilding the
country's shattered banking system, against the advice of a government
auditor, according to a report in this week's Far Eastern Economic Review.
The fees haven't been publicized and were paid against the advice of the
auditor, who questioned the fairness of the contract, the Review said.
Government officials disclosed the transaction to the Review. The Far
Eastern
Economic Review is owned by Dow Jones & Co., which publishes this and other
newswires.
U.S. investment banks Lehman Brothers (LEH) and JP Morgan & Co. (JPM) were
paid $15 million each, and Indonesian government-owned Danareksa Sekuritas
and Bahana Pembinaan Usaha were each paid $7.5 million in April.
Last November, they helped the Indonesian Bank Restructuring Agency reach
agreements with the owners of five failed banks to deliver 96 trillion
rupiah
($1=IDR8,157) worth of companies, shares and other assets to settle the
debt
to the government left behind when their banks collapsed.
Fees paid to foreign advisers are a contentious issue in Indonesia in the
lead up to landmark elections, with nationalist sentiment running high.
Leading opposition economic figure Kwik Kian Gie of the Democratic Party of
Struggle this week criticized Lehman and JP Morgan for undervaluing
Indonesian assets, leading the government to sell them on the cheap.
(MORE) DOW JONES NEWS 06-02-99