Court declares PSM bankrupt for failure to repay debt
Court declares PSM bankrupt for failure to repay debt
JAKARTA (JP): The Jakarta Commercial Court declared publicly listed finance company PT Putra Surya Multidana (PSM) bankrupt on Tuesday for its failure to repay US$1 million in matured debt to New York-based Phoenix Global Investment Corp.
"We hereby declare PT Putra Surya Multidana bankrupt as compliant to Law No. 4/1998 on Bankruptcy," presiding judge Sihol Sitompul said reading the verdict.
The bankruptcy petition filed by the plaintiff met all the stipulations laid down in the bankruptcy law, Sihol said. He added that although Phoenix was the only party filing the petition, the firm had proof PSM had at least two creditors.
He said the plaintiff had proven PSM had at least one matured debt and two creditors -- the prerequisites for any party to be declared bankrupt under the existing bankruptcy law.
In addition to the plaintiff, PSM also owes debts to New York- based Virgin Capital Corporation in the amount of $1 million and to a number of banks under the control of the Indonesian Bank Restructuring Agency.
The defendant's lawyer, Chairunnisa Jafizham, said she would appeal the bankruptcy verdict to the Supreme Court within eight days.
The 1998 Bankruptcy Law requires that an appeal be filed within eight days after a verdict in a bankruptcy case is handed down.
"We will see what we can do for the appeal," she said after the court hearing.
Phoenix Global Investment filed a bankruptcy claim against PSM earlier this month for the latter's failure to pay matured interest payments on the $1 million in convertible bonds it issued to the foreign bond holder.
Marthens Manafe, the plaintiff's lawyer, said the convertible bonds were issued to Phoenix Global in December 1996 and would mature in May 2001. He added that interest payments on the bonds were to be paid by the issuer each July.
"Because they (PSM) failed to pay the matured interest payments for July 1998 and July this year, the whole principal value of the bond automatically became due," he said.
PSM, listed on the Jakarta Stock Exchange (JSX), is an affiliate of the heavily indebted Putra Surya Perkasa (PSP) Group.
PSP, among IBRA's largest debtors, has been categorized a noncooperative debtor for its failure to comply with the agency's debt restructuring program.
The business group operates eight subsidiaries and owes a total debt of some Rp 5 trillion to banks under the control of IBRA.
Trading on shares of PSM was suspended by the JSX two months ago over the reported disappearance of its president director, Ng Chong Yeng, who was alleged to have pocketed some $45 million of the company's funds. (udi)