Court rejects bankruptcy petition against Manulife

Court rejects bankruptcy petition against Manulife

JAKARTA (JP): The Central Jakarta Commercial Court dismissed
on Thursday a bankruptcy petition filed against joint venture
insurance company PT Asuransi Jiwa Manulife Indonesia (AJMI), a
subsidiary of Canada's Manulife Financial Corp.

The Court said it had no authority to try the case due a lack
of legal grounds.

"The judges are of the opinion that the plaintiff's bankruptcy
petition is rather complicated and the commercial court has no
authority to determine whether or not Manulife has to pay the
claim ... ," head judge Hassan Basri said.

The bankruptcy petition was filed on July 25 by the
beneficiary of a deceased insurance policy holder, after AJMI
refused to pay an insurance claim valued at Rp 50 million
(US$5,847).

The plaintiff also demanded compensation of Rp 5.1 billion,
consisting of Rp 5 billion for non-material losses and Rp 50
million for the unpaid claim.

Manulife has refused to pay the claim because policyholder
Taufik Effendy, who died in January 2000, did not provide the
insurance company with accurate information about his health
condition at the time he subscribed to the policy.

Taufik allegedly took out the policy in April 1999, but in
July was diagnosed with chronic kidney failure and hypertension.
He eventually died of kidney failure.

Manulife praised the court's verdict.

"This is a victory for all of our customers who completed
their application forms and conducted their business honestly,"
AJMI president Philip Hampden-Smith said.

"It is very important that the law has changed so that it is
impossible for ridiculous cases (like the Manulife case) to be
brought before a bankruptcy court in an attempt to ruin
companies," he said.

According to Hampden-Smith, the whole case was "just an
attempt to push something through that is illogical".

Meanwhile, the plaintiff's lawyer was visibly disappointed
with the verdict, but vowed to fight on to ensure that his client
"gets what is rightfully his".

"As long as Manulife does not honor its obligation to my
client, I will take every legal step available to defend my
client's rights and interests, including filing a bankruptcy
petition against the company," said Yuhelson, from law firm Bramm
& Associates, when asked to comment on the verdict.

He also said he would appeal to the Supreme Court.

Established in 1985, Manulife Indonesia is the fourth-largest
life insurance company in the country with total assets worth Rp
2.1 trillion. A majority of the company's shares are owned by
Manulife Canada, with 71 percent, while minority stakeholders
include the International Financial Corporation (IFC), a
subsidiary of the World Bank, which has a 9 percent shareholding.

Manulife Indonesia operates its business through a network of
72 branches in 33 cities throughout Indonesia, with the support
of more than 3,000 staff.(03)