The most logical bidder would be Standard chartered, which certainly knows the region well, has been operating in Indonesia and has banking is its core business

Hugh Young Aberdeen Asset Management

The government and the Indonesian Bank Restructuring Agency (IBRA), which holds 60.3% of the BCA, have started disputing publicly which of them has the right to choose between two foreign bidders.

A successful sale would be taken by foreign investors as a sign that the time has come to re-engage with the Indonesian economy.

"The real message will come from the conclusion of the sale," Hugh Young of Aberdeen Asset Management in Singapore told the BBC's World Business Report.

"To whom the bank goes, and at what price, is just as important as how the winning bidder can control and influence the bank given its size, importance and some of the outstanding loans."

Bidders waiting

Anglo-Asian banking giant Standard Chartered Bank and US investment firm Farallon lead the two short listed consortia in the sale which is expected to raise around $450m for cash-strapped Indonesia.

"The most logical bidder would be Standard Chartered, which certainly knows the region well, has been operating in Indonesia and has banking is its core business, but the process has been less than transparent," said Mr Young.

IBRA chairman I Putu Gede Ary Suta said his agency would announce the winner of a 51% government stake in BCA next week, despite political interference.

"IBRA always faces a lot of political pressure, a lot of conflicting interests," he said.

"The BCA sale will be successfully completed despite government policy."

Earlier in the week State Enterprises Minister Laksamana Sukardi said IBRA was no longer authorised to pick the winner.

Mr Sukardi said he would head a new panel with Indonesia's finance minister, Bank Indonesia governor Syahril Sabirin and Mr Putu to do the job.

But Mr Putu believes IBRA alone has the right to pick the winner unless the government revokes legislation giving it the authority.

Banking football

IBRA took over BCA, which has 800 branches, three years ago when its parent the Salim Group failed in the wake of the 1997-98 Asian financial crisis.

The International Monetary Fund blamed the failure, due to government interference, of previous attempts to sell BCA for suspending its $5bn lending programme to Indonesia in December 2000.

The programme resumed last year.

Mr Putu said the IMF and the World Bank have publicly supported IBRA's efforts.