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Court Backs Indonesia Bank Closure

January 3, 1998

JAKARTA, Indonesia (AP) _ A high court has upheld the liquidation of a bank owned by President Suharto’s half-brother, a newspaper reported Saturday.

Bank Jakarta, owned by Suharto family member Probosutedjo, was one of 16 allegedly insolvent banks shut down Nov. 1 by the government and Bank Indonesia, the country’s Central Bank.

The liquidations were part of an International Monetary Fund-backed reform program to tackle a prolonged economic crisis triggered by a sharp drop in the value of the rupiah.

Probosutedjo had contended that the closure of his bank was unfair, and the Jakarta Administrative Court ruled Tuesday that Bank Jakarta could remain open pending a lawsuit filed by Probosutedjo against the finance minister and Central Bank governor.

However, the State Administrative High Court, acting on an appeal by the two sued officials, reversed the lower court ruling, saying it had breached court procedures, the Jakarta Post said.

Probosutedjo is the only bank owner trying to block liquidation. Suharto’s millionaire son, Bambang Trithamodjo, dropped a similar lawsuit on Nov. 12.

Bambang was a part-owner of Bank Andromeda, one of the failed banks. Andromeda’s owners were later allowed to take over another bank that is still in business.

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