Dharmala Sakti seeks to annul bankruptcy status

JAKARTA (JP): Publicly listed PT Dharmala Sakti Sejahtera has asked the Supreme Court to annul its bankruptcy status, claiming that the verdict is legally flawed.

Dharmala Sakti's lawyer Jimmy Chandra Maschur said on Monday that the verdict issued by the Jakarta Commercia Court in early June breached standard procedures.

"There were irregularities during court procedures by which Dharmala Sakti was declared bankrupt," Jimmy said, adding the company had filed an appeal to protest the decision.

The majority creditors of Dharmala Sakti voted in early June to bankrupt the listed company after they turned down the latter's debt restructuring proposal.

A day after the vote, the Commercial Court, on behalf of the creditors, officially declared Dharmala Sakti bankrupt.

According to an existing law, a company which is declared bankrupt due to a vote by creditors can not make an appeal.

Jimmy said the voting was held prematurely, adding that the Jakarta Commercial Court should have given Dharmala Sakti time to revise its debt restructuring proposal to persuade the voting creditors.

"Depriving Dharmala Sakti of its rights has sent the company into bankruptcy," Jimmy said.

He also criticized that the weighting of the vote of each creditor was based on a wrong rupiah to U.S. dollar exchange rate.

Dharmala Sakti owes debts in both rupiah and dollars to various creditors.

"The result of the voting was invalid as it was not using the appropriate rupiah to dollar exchange rate as published by Bank Indonesia," Jimmy said.

Joint venture creditor PT Hanil Bakrie Finance Corporation filed a bankruptcy suit in mid-February against Dharmala Sakti for the latter's failure to repay a US$2.4 million matured debt.

Dharmala Sakti then asked the court to hold off issuing a verdict in the bankruptcy suit, which was filed in order to allow the holding company to negotiate its debt restructuring with the creditors.

In the 1998 Bankruptcy Law the request is possible as stipulated in its suspension of payment section, which says that a company facing a bankruptcy suit can temporarily halt the action by filing a suspension of payment request to the court.

Under the suspension of payment procedure, the fate of the company would be decided by the creditors' majority vote instead of court ruling.

Among the largest creditors of Dharmala Sakti who participated in the voting process were the Indonesian Bank Restructuring Agency (IBRA), Hong Kong-based Peregrine Fixed Income, currently in liquidation, the Singapore branch of the Canadian Imperial Bank of Commerce (CIBC), joint venture PT AB Sinar Mas Finance and the Jakarta branch of the Standard Chartered Bank.

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

There are five companies affiliated with the Dharmala Group which have been declared bankrupt: PT Dharmala Agrifood, PT Putra Surya Multidana, PT Deemte Sakti Indo, PT Putra Sejahtera Persada and foreign affiliate Detron Ltd. of Singapore. (udi)