DBS takeover bid of Bank Danamon draws flak in Indonesia

Lawmakers from two of Indonesia's most powerful political parties voiced opposition on Tuesday to a bid by Singapore's DBS Group to take over local lender Bank Danamon, and said they wanted to bar heavy foreign ownership of local banks.

Local investors and bankers in Jakarta told Reuters they would lobby against the bid by DBS, even though there seemed to be no regulatory obstacles. Several complained Indonesian banks were not given a level playing field overseas.

Harry Azhar Azis of the Golkar party and the vice-chairman of the parliament's financial committee indicated the banking deal, in which DBS proposes to issue shares to buy Singapore state investor Temasek Holdings' 67 percent stake in Danamon and to pay cash to buy out minority investors, could not be immediately blocked; but with a presidential election approaching in 2014, politicians and policymakers could play to the domestic audience, where nationalism can be a vote-winner.

Local bankers and investors also said they opposed the deal.

"This is not about another country's expansion to Indonesia," said Pahala Mansury, the chief financial officer of Indonesia's largest lender, Bank Mandiri, wh ich is struggling to expand overseas to become a regional player.

"We need to see equal treatment in other countries and in Indonesia. Frankly, we are still facing obstacles to develop in Singapore now," said Mansury.

ORIGINAL SOURCE
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