Indorayon's foreign shareholders to sue govt<\/p>\n
JAKARTA (JP): Foreign shareholders of publicly listed pulp and
\nrayon firm PT Inti Indorayon have decided to file suit against
\nthe Indonesian government over the mid-1998 suspension of the
\nfactory's operations in Porsea, North Sumatra.<\/p>\n
The trustee of Indorayon foreign shareholders, lawyer Todung
\nMulya Lubis, said on Friday the foreign investors had lost their
\npatience because the government had not demonstrated serious
\nefforts to solve the dispute that forced the plant to stop
\noperating in June 1998.<\/p>\n
\"The foreign shareholders are going to file suit against the
\nIndonesian government at the International Center for Settlement
\nof Foreign Investment Dispute in Washington DC,\" he told a news
\nconference.<\/p>\n
\"They will charge the Indonesian government for unlawful
\nclosure. The legal documents will be ready in two weeks,\" he
\nsaid.<\/p>\n
Todung said the foreign shareholders, who together own 86
\npercent of Indorayon, however, would still give the government
\ntime to act on its recent plan to assign an independent auditor
\nto investigate the company before proceeding with the lawsuit.<\/p>\n
\"If the team set up by the government to manage the new audit
\ndoes not come up with clear terms of reference and a timetable
\nfor the audit, foreign shareholders will immediately file a
\nlawsuit. It could possibly be done at the end of April,\" Lubis
\nadded.<\/p>\n
President Abdurrahman Wahid said on Thursday a new audit would
\nimmediately be done on Indorayon by a special team established by
\nthe government without having to reopen the company's factory.<\/p>\n
However, Indorayon's chief commissioner Palgunadi Setyawan
\nsaid it would be impossible to obtain accurate data to prove the
\nallegations that the factory's operations damage the environment
\nand cause public health hazards.<\/p>\n
\"It would need about six months to prepare everything from log
\nsupply to machine adjustment to make the factory operate at the
\nnormal capacity and be ready for auditing,\" he said.<\/p>\n
The two-decade presence of Indorayon's pulp and fiber factory
\nin North Sumatra, which has a capacity to produce 240,000 metric
\ntons of pulp in addition to 60,000 tons of rayon fiber a year,
\nhas led to mounting criticism and pressure from local people and
\nmany non-governmental organizations.<\/p>\n
State Minister of Environment Sonny Keraf recently recommended
\nto the Cabinet that the plant be closed down or relocated to
\nanother area.<\/p>\n
But the government did not respond to the recommendation after
\nmost other ministers instead proposed a new audit of Indorayon
\nbefore any decision was made.<\/p>\n
Last year then president Habibie ordered an independent audit
\nbut the instruction was never implemented.<\/p>\n
According to Indorayon's finance director David Pile, major
\ncreditors, such as financial institutions and banks, were the
\nparties that had the biggest interest in the lawsuit plan.<\/p>\n
Pile said that under a debt restructuring program reached last
\nyear, Indorayon agreed to swap debt for equity with foreign banks
\nand bondholders.<\/p>\n
He said the restructuring program was actually based on the
\nassumption that the factory would be reopened in the first half
\nof this year.<\/p>\n
Pile said the first coupon payment that falls due in December
\n2000, however, could be rolled over until the following year
\nsince the company had built flexibility into its debt
\nrestructuring plan.<\/p>\n
He said Indorayon's inability to operate during the last 20
\nmonths had resulted in a sharp drop in its market capitalization
\nvalue from about $1.4 billion in 1996 to only around $40 million
\nat present.<\/p>\n
Inti Indorayon is listed on the Jakarta Stock Exchange and is
\nalso traded in the United States through American depository
\nreceipts. (cst)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/indorayons-foreign-shareholders-to-sue-govt-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}