BFC again sued by foreign creditors

JAKARTA (JP): Four Hong Kong-based creditors filed a bankruptcy suit against finance company PT Bakrie Finance Corporation (BFC) for the second time on Wednesday for the company's failure to pay US$13.5 million in debt.

The creditors' lawyer William S. Palijama of Hanafiah Ponggawa Adnan Bangun Kelana law firm said previously the four foreign creditors plus Hana Bank of Hong Kong filed the same bankruptcy suit against BFC in August last year, but was turned down by the court on the technical matter.

"We are filing a bankruptcy suit against BFC for the second time and again in the effort to recoup the creditors' money," he said.

The four creditors who are filing suit are AB Capital Markets Ltd., Cho Hung Leasing & Finance Ltd., Hanmi Leasing & Finance Ltd. and KEB Leasing and Finance Ltd., said William.

The loan, which matured on May 3, 1999, was part of a $21 million total loan matured under a syndicated loan agreement involving seven foreign financial institutions and one local bank, Bank Negara Indonesia, William said.

However, the four creditors -- in the context of protecting their own rights -- are acting independently from the other creditors under the syndicated agreement.

"Each amount outstanding at any time from the borrower to each lender or the agent shall be a separable and independent debt and every lender and the agent shall have the right to protect and enforce its rights arising out of this agreement," said William quoting the agreement between the syndication and BFC.

"So we do not have to get approval from the agent of the syndication or from the majority creditors under the syndication," he said.

Tae Seon Paik, a representative from one of the above four creditors (AB Capital Markets Ltd.) said that he was frustrated with the implementation of the Bankruptcy Law here that it seemed to be so difficult to bankrupt even an obviously defaulted company.

"These companies get away without paying their debts and continue operations, while their creditors are suffering," he said.

Sometimes they even sued the creditors who had filed a bankruptcy suit against them, claiming that the creditors had caused defamation to them by filing such bankruptcy suit.

"This kind of attitude is totally unacceptable in the financial sector," he said. (udi)