Asian JV in Doubt

Stephen Harris

15 April 2005

The 2003 bancassurance joint venture between Axa Asia Pacific Holdings Ltd and Bank Mandiri of Indonesia formed to expand financial protection and wealth management products and services in the rapidly growing Indonesian market has been jeopardised by a bribery investigation at Mandiri. Prosecutors are investigating more than $110 million of loans extended by Mandiri, the country's biggest lender. The bank’s chief executive and other senior managers are implicated in one of the biggest investigations into Indonesia's financial sector since the Asian crisis in 1997-98 led to the near wholesale collapse and recapitalisation of the country's banks. Bank Mandiri has more than 6.7 million customers, 682 branches throughout Indonesia and total assets of $28 billion.