Bank Bali defends decision to prosecute in Singapore

JAKARTA (JP): Hong Kong-based Bali International Finance Ltd., a unit of publicly listed Bank Bali, defended on Friday its decision to file a civil lawsuit against businessman Bambang Sutrisno at the court in Singapore.

The legal representative for Bank Bali, Hotman Paris Hutapea, said that the widely criticized move was the only way for the bank and seven other claimants to recoup their money from Sutrisno in a US$16.5 million loan dispute.

"What we did was perfectly legal because the law says that claims should be filed in a court where the accused lives," Hutapea said, noting that Sutrisno had lived in Singapore for over a year.

Hutapea said that the fact that Indonesia did not have a reciprocal treaty with Singapore made it impossible to obtain the money from Bambang through Indonesia's court system.

"If we filed the suit in Jakarta, even if we won the litigation, the court would not be able to execute the decision because Sutrisno's assets are in Singapore. It would merely be a paper victory," he said.

Bank Bali's move has been criticized by legislators and local attorneys as demeaning the country's court system.

Bali International Finance acted as the lead manager and agent for the $16.5 million loan syndicate of nine domestic and foreign finance institutions for PT Surya Supratama Finance in Jakarta.

The syndicated loan was personally guaranteed by Bambang Sutrisno under an indemnity and guarantee agreement with Bali International Finance.

Sutrisno controlled 90 percent of Surya Supratama.

When the company was unable to repay the loans, eight creditors from the syndicate filed a lawsuit in Singapore against Sutrisno.

Hutapea said that Sutrisno, in his capacity as the guarantor, agreed in the loan agreement to bypass his right to impunity if the loan was not repaid.

Under the law, a loan guarantor cannot be sued by creditors unless he or she agrees to bypass this right to impunity.

Creditors in the loan syndicate include Bank Bali's Cayman Island branch, the Hong Kong Chinese Bank Ltd., Cosmos Finance Ltd. of the locally owned Bank Buana and the Duta International Finance Company of Bank Duta in Jakarta.

The syndicate also includes Bumi Daya International Finance Ltd., a unit of state Bank Bumi Daya, Bank Dagang Nasional Indonesia (BDNI) Finance of the government-run BDNI, Danamon Finance Company Ltd. of the state-run Danamon and several undisclosed local private banks.

All of members of the loan syndicate, except for Bank Bali, are headquartered in Hong Kong.

Sutrisno is also a former shareholder of Bank Surya, which was closed down by the government last April for insolvency.

Last year, Sutrisno sued his former business partner, Sudwikatmono, in Jakarta over disputed acquisition deals and lodged complaints with the National Police against the latter for defamation, slander and contempt.

Sutrisno's wife, Gina Widjaja, recently sued Bali International Finance and her husband at the West Jakarta district court because the assets Sutrisno pledged for the indemnity agreement was jointly owned by the couple.

Since the indemnity agreement was made without her approval, Mrs. Widjaja demanded that the court declare the agreement void. (das)