Canada opposes RI handling of share row

Canada opposes RI handling of share row

JAKARTA (Reuters): Canada on Tuesday launched an angry public
attack on Indonesia's handling of a share purchase row involving
Toronto-based Manulife Financial Corp.

The Canadian embassy's senior trade commissioner, Ken Lewis,
accused police of harassing Manulife and pursuing a "ludicrous
case" against the insurance giant, warning that the impact on
foreign investment could threaten the fragile recovery.

Police have held a senior Manulife Indonesian executive for
three weeks without charging him and have ordered $20 million of
the company's funds to be frozen.

"We see it as a case of the harassment of a legitimate
international investor," Lewis told reporters after taking the
unusual step of calling a news conference on the issue, saying a
quiet approach with officials had failed.

"The Indonesian police have taken actions... which have
basically threatened international investors in Indonesia.

"We believe over the long term that the harassment of this
company, Manulife, is hurting Indonesia's economy," he said.

Canadian Prime Minister Jean Chretien has personally written
to Indonesian President Abdurrahman Wahid expressing concern.

The increasingly acrimonious brawl centers on a 40 percent
stake that bankrupt Indonesian company PT Dharmala Sakti
Sejahtera holds in a joint venture with Manulife.

Manulife bought the stake for $20 million at a government
auction last month, raising its stake in PT Asuransi Jiwa
Manulife Indonesia (AJMI) to 91 percent. The World Bank's
International Finance Corporation owns the remainder.

But a British Virgin Islands company, Roman Gold Assets,
emerged to claim it had bought the stake from a Samoan company
for $50 million a week earlier.

Police launched an investigation after Roman Gold filed a
police report alleging share certificates had been forged.

Manulife's senior Indonesian vice president, Adi Purnomo
Widjaya, was arrested and held for three weeks and police ordered
Manulife's $20 million payment be frozen.

Widjaya was released on Monday night, but officially remains a
suspect.

"When international investors see what is happening to
Manulife, when they see harassment and false charges... we do not
expect they will continue to come to Indonesia, and that is
something that is something which is going to hurt Indonesia,"
Lewis said.

"Foreign investors can go somewhere else, Indonesians have to
live here," he said, adding he had already advised Canadian
companies to hold off buying assets from troubled Indonesian
partners because of the Manulife case.

"And I would suppose that other (foreign) commercial
counselors in this city are probably giving the same advice to
their business clients," he said.

Little is known about Roman Gold: a search of the archives of
most of the world's major newspapers, magazines and news services
going back 10 years shows nothing before the Manulife row.

"We see this activity as undermining Indonesia's own legal
system and eventually scaring away investors in Indonesia," Lewis
said. "Quite frankly the claim put forward by... Roman Gold, an
unheard of company is quite ludicrous.

"Neither of these companies, Roman Gold or the Samoan company
have any proof of ownership or proof of sale."

Roman Gold could not be contacted for comment.

Manulife said on Monday it had filed criminal suits against
Roman Gold and Dharmala Sakti chief Suyanto Gondokusumo.