Bakrie & Bank Capital: The Tip of an Iceberg?

Last Friday, Jakarta Compiste Index (JCI) was closed at the position of 2,992, or 8 point more to reach 3,000. That increase seemed quite odd, so on the next trading day (today), JCI started to weakened, and when this article was written, JCI has fell 0.89% into position of 2,966. Actually, JCI could have been reach 3,000 (in average), yet it didn’t happen. Why?

Yes, the problem was caused by a huge correction of Bakrie’s Seven Brothers. Lately, B7 was being overwritten by quite deep correction. The trigger is due to the news about false deposit funds deposited in Bank Capital (BACA). As we’ve known, the seven members of B7 have cash funds in form of saving and deposits amounted to Rp5 trillion deposited in BACA, it is counted on financial statement of first quarter 2010, which partially been audited. But on the other hand, the value of funds of the third parties of BACA was only Rp2.7 trillion (in average). Logically: if B7 had funds amounted to Rp5 trillion deposited in BACA, then the third party fund owned by BACA should be greater than Rp5 trillion, because BACA’s customers who deposit their savings and surely not only B7. But it turned out that third party fund owned by BACA was only Rp2.2 trillion. So the question is: Is it true that B7 have cash funds amounted to Rp5 trillion?

Lately, B7’s management has been clarifying that news by stating some reasons that the point is, explained that their deposits in BACA was not as much as that (Rp5 trillion), but only some billion Rupiah. So at the end, there is no mistake here. Well, the management can say whatever they want to say. But the fact is, their signed and authorized financial statement speak otherwise.

This news triggered some speculations. Some securities analysts judged that there have been some efforts by interested parties to discredit Bakrie Group through the news. The analysis was based on the fact that B7’s shares immediately fell down after this news spread, so it simply can be said like that. Well, but it seems that the conclusion is very superficial. Because if we ask once again: Bakrie indeed aggrieved because of this case, since this case has made lots of creditors increasingly distrusted of Bakrie Group. But once again, who did get benefit by the fall of B7’s shares? Not only the investors, but Bakrie’s creditors would also panic if the shares fall down, because apparently, those shares are made as the collateral when Bakrie ask for loan. Some media has started to guess, who gets the benefit of this case, yet there still no certain answer.

Actually, it is possible that this case wasn’t the first. B7 probably has done the same practice of ‘claimed to have the funds of some trillion’ since long. It’s just that this case only revealed now, and it was not because of the foresight of Bapepam as the authority, but due to the analysis of an analyst who was able to reveal a discrepancy in the composition of cash funds of B7. The finding showed that one of B7 members, namely Bakrie Sumatera Plantations (UNSP), have cash funds amounted to Rp5.3 trillion deposited as deposit in BACA. On the first quarter 2010, UNSP recorded to have cash funds amounted to Rp4.5 trillion. Here’s the gaffe: that Rp4.5 trillion of funds deposited in many banks, but why for the most part, deposited in one place, which was Bank Capital? While the other Rp1 trillion was spread in about 15 different banks. What’s so special about this bank?

After checking, apparently BACA does not have third party fund in that amount, yet only Rp2.7 trillion. So the conclusion is: Either the UNSP or BACA, one of them was certainly did not honest about the number of that funds, because the unsynchronized was too big.

Not only B7 that has ‘bogus’ cash funds in Bank Capital. Benakat Petroleum (BIPI) also recorded cash funds amounted to Rp1.5 trillion on its financial statement, deposited in Bank Capital. After this news spread out, they started to make up some self-defense arguments.

Anyway, this case could be just the tip of the iceberg, where B7 and BIPI are very likely not the only player from this bogus deposit practice. It could also be that those bogus deposits are not the only manipulation made by the companies (not only B7 and BIPI). If you can make ‘trick’ for the cash funds, then you can do more about the non-cash funds. Unfortunately, it would take more deeper analysis in order to know that, where Bapepam or IDX themselves couldn’t do that. I don’t know who can.

So who gets the benefits from the case of B7, BIPI, and Bank Capital? Perhaps no one. This case was just more like a carelessness of the companies themselves in compiling their financial statement, where they themselves probably did not think that there would be that careful analysis about the problem. We need to wait, whether the analyst would reveal more other ‘bizarre’ things, before then we will need to wait any defense out of the accused parties.

Original article was written on July 19^th, 2010.