Court punishes Niaga, Credit Lyonnais
JAKARTA (JP): Bank Niaga lost another battle with PT Suryamas Dutamakmur after the Jakarta High Court ordered the bank pay compensation of Rp 290.08 billion (US$36 million) to the property developer.
Suryamas' attorney Hotman Paris Hutapea from Makarim & Tiara S., said the high court verdict, dated April 12, also ordered the bank to pay a 6 percent interest rate per annum on the total amount.
The high court pronounced all agreements between Bank Niaga and Suryamas as invalid.
In December, Bank Niaga lodged an appeal to the court after the South Jakarta District Court ordered the bank pay $60 million to Suryamas.
In another verdict, the court also upheld a South Jakarta District Court decision ordering Credit Lyonnais Bank to return PT Nugra Santana derivative deposits totaling $1.56 million.
The court also ordered Credit Lyonnais pay compensation of Rp 1.06 billion to Nugra Santana, a company owned by Ponco Sutowo.
On Wednesday, Bank Niaga said it would appeal to the Supreme Court, insisting Suryamas had not paid back a $50 million loan dating from July 1997 through a derivative transaction scheme which matured on July 20 last year.
Bank Niaga vice president Yos Badilangoe said the Jakarta High Court's decision contained "irregularities".
"How come the high court declared all of our agreements with Suryamas invalid, when those transactions were in accordance with Bank Indonesia's circular letters and legal?," Yos told The Jakarta Post.
The legality of derivative transactions is supported by the Supreme Court through its recent review verdict bankrupting listed agricultural food producer PT Dharmala Agrifood.
"That Supreme Court verdict confirms the legality of derivative transactions between Bank Niaga and Dharmala Agrifood. And our derivative transactions with Suryamas are exactly the same as those of Dharmala."
Hotman agreed derivative transactions were legal in Indonesia, but said transactions between Niaga and Dharmala Agrifood could not be used as a reference, because they did not involve derivative transactions but promissory notes and loan agreements.
"Derivative transactions have been legal for a long time in Indonesia, so as long as they are in accordance with the rules. But in the above derivative case, it is clear that Bank Niaga and Credit Lyonnais did not uphold prudent banking practices and rules on derivative transactions and even inflicted losses on their clients," Hotman said.
The dispute between Niaga and Suryamas started last year when Suryamas applied for a loan from Bank Niaga to develop Rancamaya housing complex in Bogor and Bumi Manggala housing complex in Cibubur, East Jakarta.
On July 17, 1997, the bank agreed to lend $50 million to the real estate developer through a derivative transaction scheme at a rate of Rp 2,596.67 to the dollar.
The rupiah was still trading at Rp 2,425 to the dollar at the time.
But Suryamas' lawyer said his client never received any money from the bank, and the bank had never explained the risks of the facility to his client.
In a surprising move mid last year, the bank asked the property developer to repay the $50 million loan at a rate of Rp 14,200 to the dollar, after it said the loan had matured on July 20, Hotman said.
Yos said Suryamas admitted in an audited financial report of Dec. 31, 1997, approved by shareholders last year, that it owed Bank Niaga $50 million.
"Decisions made by both the district court and the high court offend our sense of justice. How come the district court at that time refused to hear independent opinions from expert witnesses of Bank Indonesia and public accountants about who had the dollar obligations?" (rid)