Dharmala faulted for selling its shares in Manulife

JAKARTA (JP): The Capital Market Supervisory Agency (Bapepam) said on Thursday that the sale of PT Dharmala Sakti Sejahtera's (DSS) 40 percent stake in insurance company PT Asuransi Jiwa Manulife Indonesia (AJMI) violated capital market regulations.

Bapepam questioned the Power of Attorney with which DSS sold its 40 percent stake in AJMI to the Virgin Islands-based company Roman Gold Assets Ltd.

"DSS management's failure to notify its auditors, Bapepam or the public of the existence of an important document such as the Power of Attorney, is a violation of the capital market regulation," Bapepam said in a press statement.

Bapepam said that based on irregularities, the agency would upgrade its preliminary investigation to a full investigation.

"Bapepam is collecting evidence to immediately start a full investigation on the suspicion of a crime in the stock market," the agency said.

Bapepam began its probe into the sale of Dharmala's 40 percent stake in AMJI, following conflicting claims over ownership of the stake.

AJMI's Canadian-based parent company Manufacturers Life Insurance Co. said it was the legal owner of the 40 percent stake in its subsidiary.

Manulife recently bought the stake for Rp 170 billion (about US$18 million) to raise its ownership in AJMI to 91 percent from 51 percent through an auction carried by the Jakarta Commercial Court.

The shares were previously owned by Dharmala, which was declared bankrupt in June by the Jakarta Commercial Court.

The court held a tender on Oct 26 to sell Dharmala's stake in AMJI. The proceeds were to be used for paying Dharmala's financial obligations to its creditors.

But Roman moved to stop the tender, claiming it had already bought Dharmala's stake in AMJI on Oct. 19.

As Roman's appeal was ignored, the firm filed a complaint with the police, prompting the detention of AJMI's vice president Adhie Poernomo on an allegation that he duplicated Dharmala's AMJI share certificates.

His detention drew strong criticism from the Canadian government, which warned that the case was hurting the country's investment climate.

Bapepam found that in March 1996, DSS' former president Suyanto Gondokusumo pledged its 40 percent stake in AMJI to Harvest Hero Limited as collateral to guarantee promissory notes worth US$50 million issued by Dharmala's subsidiary PT Putra Suryagraha Pratama.

In the same year, Harvest Hero then issued a Power of Attorney to West Samoan company Highmead Limited for the sale of its stake in AMJI.

Highmead then sold Harvest's 40 percent stake in AMJI to Roman Gold in October, one week before the tender in Jakarta.

Meanwhile, both Manulife and Roman challenged each other to prove their respective claims over the stake by providing the necessary documents. (bkm)