Commercial Court's decision criticized

JAKARTA (JP): Creditors lodged a protest on Thursday over the Jakarta Commercial Court's decision to grant a three-month suspension of payment to PT Dharmala Sakti Sejahtera without their prior consent.

"It is totally beyond imagination. The court ruling 'directly' contradicts Section 217 of the 1998 Bankruptcy Law," said Rahmat Bastian, a lawyer representing one of the creditors, Toronto- based Canadian Imperial Bank of Commerce (CIBC).

Section 217 stipulates that granting the suspension of payment must be based on the majority vote of creditors, and is not based on the court's sole discretion, Rahmat told The Jakarta Post after the court hearing.

Dharmala Sakti was taken to bankruptcy court by its creditors in mid-February for failure to pay debts worth US$2.4 million.

The company then filed for a suspension of payment to temporarily halt the bankruptcy suit.

According to the Bankruptcy Law, the request, if approved by the majority of creditors, would allow the concerned company to have a maximum of 270 days to negotiate a debt restructuring deal with all the creditors.

The majority vote is decided by at least three-quarters of the number of creditors who attend the court hearing. The vote must represent at least 50 percent of the total value of debt.

The court, however, did not apply such a voting procedure to reach the controversial ruling on Thursday, saying the procedures were not applicable since not all the creditors were registered or present at Thursday's court hearing.

Presiding Judge Victor Hutabarat said all creditors had to register their debt claim and get it verified by the court receiver before a voting mechanism could be conducted.

All creditors also had to be present at the court hearing, he added.

But Frankie A. Ongkie of PT Hanil Bakrie Finance -- one of the creditors -- dismissed the court's reason, saying that the Bankruptcy Law also stipulates that the voting could begin even if all the creditors had not registered their claims or were present at the court hearing.

"The voting can be done by attending creditors in the case where not all the creditors are present at the court hearing," he said quoting Section 217, Article 5.

"By all circumstances the court can never grant the request by its own discretions. It can only adjourn the court hearing," he said.

Dharmala Sakti is a holding company of Dharmala Group, which is owned by the Gondokusumo family.

There are at least three companies affiliated to the Dharmala Group which have been declared bankrupt, namely, PT Dharmala Agrifood, PT Putra Surya Multidana and foreign affiliate Detron Ltd. of Singapore.

Another company, PT Aster Dharma, was also declared bankrupt, but later overruled by the Supreme Court through its civil review decision late last year. (udi)