Bank Niaga, Suryamas case to go to high court

JAKARTA (JP): Publicly listed Bank Niaga said it would appeal a court decision ordering it to pay a US$60 million fine to PT Suryamas Duta Makmur.

The bank's attorney, Faisal Syahmenan of Warens & Achyar law firm, said Wednesday that his client was not satisfied with the ruling and had decided to appeal to the Jakarta High Court.

The South Jakarta District Court ordered Bank Niaga on Monday to pay the fine over a derivative transaction.

Judge JMT Simatupang, who presided over the hearing on Monday, said the bank had failed to meet its obligations and had broken the law.

"The bank has broken the law because it has failed to meet the agreement it made with PT Suryamas," Simatupang said.

Suryamas' lawyer, Hotman Paris Hutapea, said the bank did not honor an agreement for the property developer to buy $100 million in currency futures at an agreed rupiah rate of Rp 2,596.67 prior to the financial crisis hitting the country last year.

Faisal said his client was not obligated to pay the property developer.

Instead, the developer should repay the loan it obtained from Bank Niaga, he said.

"Suryamas has changed the whole story. It should be Bank Niaga that sued PT Suryamas," Faisal added.

The dispute between the two parties started last year when Suryamas applied for a loan from Bank Niaga to develop Rancamaya housing complex in Bogor and Bumi Manggala housing complex in Cibubur, East Jakarta.

On July 17, 1997 the bank agreed to lend $50 million to the real estate developer through a derivative transaction scheme at a rate of Rp 2,596.67 to the dollar.

The rupiah was still trading at Rp 2,425 to the dollar at the time.

But Suryamas' lawyer said his client never received any money from the bank and the bank had never explained the risks of the facility to his client.

But in a surprising move mid this year, the bank asked the property developer to repay the $50 million loan at a rate of Rp 14,200 to the dollar after it said the loan had matured on July 20, Hotman said.

He said his client had not received any money from the bank and therefore the agreement between Suryamas and Bank Niaga was invalid.

However, Faisal said his client had sufficient proof of the loan agreement with real estate developer.

"We have proof of the loan agreement and we will fight for Bank Niaga on the case," he said. (aly)