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.