Manulife dispute may affect RI's ties with Canada, others<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
As Indonesian and Canadian top officials trade barbed comments in
\nthe mass media over the Manulife dispute, fears are now growing
\nthat the case could cost Indonesia more than just its relations
\nwith Canada.<\/p>\n
On Friday, Vice President Hamzah Haz said Canada should not
\n\"overreact\" to the Manulife bankruptcy case, urging the latter to
\nrespect the judicial process here.<\/p>\n
\"I think Canada should not overreact. We, you know, have a
\nlegal process which is in effect. And Canada must not try to
\nthreaten us,\" Hamzah told reporters.<\/p>\n
He was reacting to a newspaper report that quoted Canada's
\nForeign Minister Bill Graham as saying his country would look at
\nall options, including sanctions, after Indonesia's Minister of
\nFinance Boediono said his government would not intervene in the
\nManulife dispute.<\/p>\n
\"We will be looking at just what international steps are
\navailable to us, particularly in terms of international financial
\ninstruments,\" Graham was quoted as saying by Canada's National
\nPost daily.<\/p>\n
Visiting Canadian Secretary of State for Asia Pacific David
\nKilgour declined on Friday to confirm the sanctions threat, but
\nsaid that his government was not overreacting.<\/p>\n
Kilgour is here on a four-day visit until Monday. The visit,
\nplanned before the Manulife bankruptcy ruling erupted, was
\noriginally aimed at celebrating 50 years of Indonesia-Canada
\ndiplomatic relations.<\/p>\n
The Canadian government has asked the Indonesian government to
\nget involved in resolving the case. But both Hamzah and Boediono
\nsaid that the government would not intervene, but allow the legal
\nprocess to take its course.<\/p>\n
Canada is a member of Indonesia's major donor consortium, the
\nConsultative Group on Indonesia (CGI), which, in November last
\nyear, pledged some US$3.14 billion in loans to help finance the
\n2002 state budget. Canada is also a member of the Paris Club of
\ncreditors, which earlier agreed to reschedule Indonesia's $5.4
\nbillion in sovereign debts maturing this year and next.<\/p>\n
The commercial court declared last week the local insurance
\nunit of Canada's Manulife Financial Corp., PT Asuransi Jiwa
\nManulife Indonesia (AJMI), bankrupt after a receiver of the now-
\ndefunct PT Dharmala Sakti Sejahtera (DSS) filed a bankruptcy
\npetition over failure to pay dividend in 1999. AJMI has insisted
\nthat no dividend was authorized by shareholders during that
\nperiod.<\/p>\n
The bankruptcy ruling, which was reached in a two-to-one vote
\nof three judges, has become controversial because AJMI was a
\nsolvent company, and there have been reports that the founder of
\nDSS, the former partner of Manulife via AJMI, has been accused of
\ntrying to defraud Manulife, as the latter had bought DSS's 40
\npercent stake in AJMI in 2000 at a government auction.<\/p>\n
Manulife has appealed to the Supreme Court.<\/p>\n
The Canadian government and the International Finance Corp.,
\nthe investment arm of the World Bank, have warned the Indonesian
\ngovernment that the Manulife fiasco could discourage badly needed
\nforeign investment from returning to the country as the issue
\nonly served to strengthen the perception of legal uncertainty
\nhere.<\/p>\n
The World Bank is the coordinator of CGI.<\/p>\n
Economist Raden Pardede expected the Supreme Court to be able
\nto deliver a \"sensible verdict,\" because otherwise the state
\nbudget would be seriously affected and foreign investors would
\ntruly stay away from the country.<\/p>\n
\"Should the CGI and other multinational donors halt their
\nloans, we will face budget problems,\" he told The Jakarta Post.<\/p>\n
Separately, businessman Sofyan Wanandi urged the Supreme Court
\nto immediately deliver its decision so as to avoid any further
\ndrop in foreign investor confidence in the country.<\/p>\n
Meanwhile, Supreme Court Chief Justice Bagir Manan, quoted by
\ndetik.com online news service, said he had ordered prosecutors to
\ninvestigate allegations that the judges might have been bribed in
\ntheir two-to-one bankruptcy ruling.<\/p>",
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"sponsor": "Okusi Associates",
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