Bakrie Finance survives claim for bankruptcy

JAKARTA (JP): The Supreme Court has overruled its earlier decision that declared PT Bakrie Finance Corporation bankrupt, according to Bakrie's lawyer.

Jonson Hutajulu said on Tuesday that the verdict was issued by the Supreme Court's review panel of three judges on July 13. The judges were Ketut Suraputra, Mariana Sutadi and Soeharto.

The Supreme Court Civil Review panel said in the verdict that the four Hong Kong-based creditors could not file bankruptcy against Bakrie Finance as they had loaned the money to Bakrie through Asian Banking Corp. as an agent of the syndicated loans.

The four foreign creditors are AB Capital Markets Ltd., Cho Hung Leasing & Finance Ltd., Hanmi Leasing & Finance Ltd. and KEB Leasing and Finance Ltd.

The four creditors filed a bankruptcy suit for the second time in mid-February against Bakrie Finance at the Jakarta Commercial Court for the company's failure to pay US$13.5 million in debts.

Jonson said that based on the agreement between Bakrie Finance and Asian Banking Corp., as the arranger of the loans, it could only be Asian Banking Corp. that could take legal action against Bakrie after the bank received a mandate from the majority of the creditors.

"We hope this decision can be used as a legal ground for other similar cases that might appear in the future," Jonson said.

A Supreme Court Civil Review is the final level of the Indonesian Bankruptcy Court after the appeal level, also at the Supreme Court.

The Supreme Court, previously at the appeal level, declared Bakrie Finance bankrupt in mid-May, overruling a previous verdict by the Jakarta Commercial Court which initially saved the company from bankruptcy.

The Supreme Court in its appeal verdict accepted the creditors' plain and simple arguments that the defendant had a matured debt and owed money to at least two creditors.

According to the 1998 Bankruptcy Law, a party to be declared bankrupt must have at least one matured debt and owe to two creditors or more.

Besides Bakrie Finance, PT Bakrie Investindo, the majority owner of publicly-listed PT Bakrie & Brothers is also facing a bankruptcy suit from an individual named Atas Rifara.

Atas' lawyer Dwi Ria Latifa from Rialatifa & Partners law firm said Bakrie Investindo allegedly failed to repay a Rp 1 billion (US$106,000) promissory note that matured in January 1998. (udi/rid)