BFC again sued by foreign creditors

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)