IFC loses bankruptcy battle with POF<\/p>\n
JAKARTA (JP): The International Finance Corporation (IFC), the
\ncommercial financing arm of the World Bank, lost its legal battle
\nwith publicly listed PT Panca Overseas Finance (POF) when a
\ncommercial court rejected its bankruptcy petition on Tuesday.<\/p>\n
The Central Jakarta Commercial Court approved a vote by POF's
\ncreditors to accept the company's debt restructuring proposal.<\/p>\n
Syamsudin Manan Sinaga, the chief judge at the court, ruled in
\nfavor of Panca, saying the court's priority was to seek a win-win
\nsolution for creditors and debtors.<\/p>\n
IFC legal representative Luhut Pangaribuan criticized the
\ncourt for ignoring IFC's suspicion that fictitious creditors took
\npart in last week's vote.<\/p>\n
\"We are going to appeal the ruling,\" Luhut told The Jakarta
\nPost following the hearing.<\/p>\n
He said IFC would file an appeal with the Supreme Court within
\neight days.<\/p>\n
He said that according to Article 284 of the bankruptcy law,
\ncreditors who reject a debtor's debt restructuring proposal but
\nlose the vote on the proposal are allowed to appeal the decision.<\/p>\n
Luhut added that according to the bankruptcy law, the Supreme
\nCourt must respond to IFC's appeal within 30 days of receiving
\nit.<\/p>\n
The IFC filed a bankruptcy petition against POF last year for
\nunresolved debts amounting to US$13 million.<\/p>\n
IFC said it took the financing company to court after two
\nyears of negotiations had failed to produce a debt restructuring
\nagreement.<\/p>\n
The company suspects POF fabricated 14 of its 31 creditors,
\nallotting them Rp 1.6 trillion (about $170 million) of its $230
\nmillion in total outstanding debts.<\/p>\n
It said the move enabled POF to win the creditors' vote
\naccepting its debt restructuring proposal.<\/p>\n
According to POF, under its debt restructuring proposal
\ncreditors agree to accept $40 million in debt repayment over a
\nperiod of three years.<\/p>\n
The company will pay installments of $10 million in the first
\nand second years, with the remaining $20 million to be paid in
\nthe third year.<\/p>\n
The company has said it will raise the funds by recouping
\nloans it has channeled to domestic and foreign parties.<\/p>\n
Luhut questioned the chief judge's objectivity, citing the
\ninclusion of an opinion of the Indonesian Securities Investor
\nSociety (MISSI) among the considerations he used in making his
\ndecision.<\/p>\n
MISSI held a media conference on Monday urging the court not
\nto approve the bankruptcy petition against POF, saying ruling
\nagainst the company would harm the interests of investors.<\/p>\n
\"The judge is not allowed to consider the opinions of parties
\nother than those directly involved in the case,\" Luhut said.<\/p>\n
As with a jury in the U.S. legal system, he said, a judge must
\nbe isolated from opinions expressed outside the court
\nproceedings.<\/p>\n
POF spokesman Harry Ganda said the company was relieved to
\nhave survived the bankruptcy petition.<\/p>\n
He also urged IFC not to be suspicious of Syamsudin's verdict,
\nsaying the judge had acted on the basis of fairness.<\/p>\n
\"You heard what MISSI said about the harm of declaring POF
\nbankrupt,\" he said.<\/p>\n
On the charge of fictitious creditors, Harry said earlier IFC
\nwas never able to prove its allegations with evidence that these
\ncreditors did not exist.<\/p>\n
Nevertheless, the alleged involvement of fictitious creditors
\nin the bankruptcy process has dealt another blow to the country's
\nlegal system.<\/p>\n
The Indonesian Bank Restructuring Agency (IBRA), which
\ndeals with numerous bankruptcy cases, voiced its concerns with
\nthe POF case.<\/p>\n
The agency is in charge of recouping nonperforming loans from
\nseveral major local banks, and files bankruptcy petitions against
\nuncooperative debtors.<\/p>\n
The head of IBRA's legal division, Robertus Bilitea, warned
\nthat the agency's debtors might be tempted to use fictitious
\ncreditors to avoid bankruptcy.<\/p>\n
\"Providing that POF has indeed fabricated its creditors, we
\nwill surely be on the lookout for similar schemes,\" he said.<\/p>\n
In the wake of the POF decision, he said, IBRA will take
\nfurther precautions when preparing its bankruptcy cases. (bkm)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/ifc-loses-bankruptcy-battle-with-pof-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}