Harassment of Manulife<\/p>\n
The legal jam in which Canadian Manulife Financial Corp. has
\nfound itself after legally buying the assets of bankrupt Dharmala
\nSakti Sejahtera through a government-authorized auction in
\nJakarta last month is raising great doubts over the government's
\nasset disposal program, one of the major sources of state
\nrevenue.<\/p>\n
The speed at which the police moved to arrest a senior
\nexecutive of PT Asuransi Jiwa Manulife Indonesia and freeze US$20
\nmillion of the company's funds merely on the basis of a complaint
\nfrom Roman Gold Assets Ltd., an unknown company based in the
\nBritish Virgin Islands tax-haven area, is raising big questions
\nabout the integrity of the law enforcement system, especially the
\npolice.<\/p>\n
Yet no less devastating is the subsequent erosion of
\nconfidence in the bankruptcy law and its enforcement institution,
\nthe Commercial Court, which is supposed to play a crucial role in
\nforcing recalcitrant debtors to negotiate in good faith.<\/p>\n
While we should allow legal experts to decide on the legal
\nrow, we cannot help but feel dumbfounded by the manner in which
\nthe police have pursued the case.<\/p>\n
Thus far, the first fact we know is that Manulife bought the
\n40 percent stake in PT Asuransi Jiwa Manulife (that was owned by
\nDharmala) through a government-mandated auction held in October
\nafter Dharmala was declared bankrupt by the Commercial Court in
\nJune. Manulife, as the sole bidder, won the stake at Rp 170
\nbillion ($18 million). The deal was concluded in good faith and
\nthe transaction increased the Canadian company's shareholding in
\nPT Asuransi Jiwa Manulife to 91 percent, with the remaining 9
\npercent held by the International Finance Corporation, the
\nprivate-sector arm of the World Bank.<\/p>\n
The second fact is that Roman Gold, which the police
\npreviously knew nothing about, suddenly came up with a complaint.
\nIt disputed the fact that it had bought the Dharmala stake from
\nHighmead Ltd., a company based in Western Samoa that is also
\ncompletely unknown to the police, through a Rp 350 billion deal
\nin Singapore on Oct. 19 or one week before the auction in
\nJakarta. Roman Gold's director Haryono Winarta claimed that prior
\nto the purchase, he examined documents provided by Highmead Ltd.,
\nwhich showed that Highmead had the right to sell the Dharmala
\nshares after the latter company was declared bankrupt. The timing
\nof this deal, one week before the official auction in Jakarta in
\nlate October, should nonetheless raise eyebrows because the
\npublicly listed Dharmala was declared bankrupt in early June.<\/p>\n
Surprisingly though, the police acted quickly -- unusually
\nfast indeed for such a matter, given the police's inertia in
\nhandling more high-profile cases -- without first investigating
\nthe legitimacy of the complaint.<\/p>\n
Instead of immediately arresting and detaining for three weeks
\na senior executive of Manulife and ordering the freezing of $20
\nmillion of Manulife's funds, the police should have first
\ninvestigated how Roman Gold could have purchased the Dharmala
\nassets. If Roman Gold is truly a viable investment company with
\nan international network and concluded the deal in good faith, it
\nshould have known that Dharmala had been declared bankrupt in
\nJakarta in June.<\/p>\n
Instead of immediately \"harassing\" PT Asuransi Jiwa Manulife,
\nthe Jakarta-based subsidiary of the giant Manufacturers Life
\nInsurance Co., the police should have first investigated how and
\nwhen the Western Samoan company, an entity completely unknown to
\nthem, acquired the Dharmala shares. The police should have asked
\nthe Jakarta Stock Exchange management and the Capital Market
\nSupervisory Agency about when Dharmala sold its stake or granted
\npower of attorney over the stake to the Western Samoan company.<\/p>\n
It should be noted that the bankruptcy suit against Dharmala
\nwas filed in February and, based on Indonesia's Bankruptcy Law, a
\nconservatory attachment should be imposed on the assets of the
\ndebtor, in this case Dharmala, during the bankruptcy proceeding.<\/p>\n
Needless to say, the resolution of the legal dispute over the
\nDharmala shares in PT Asuransi Jiwa Manulife will determine
\npublic confidence in Indonesia's legal system, notably the
\nbankruptcy proceedings, which are so vital in resolving the huge
\ncorporate debt overhang.<\/p>\n
After the debacle over the Standard Chartered Bank's deal to
\nacquire 20 percent of Bank Bali shares last year, the Manulife
\ncase will further determine investor confidence in the legality
\nand real value of the tens of billions of dollars in assets which
\nhave yet to be disposed by the Indonesian Bank Restructuring
\nAgency to fuel a faster and stronger recovery of the economy.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/harassment-of-manulife-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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