Dharmala sues IFC and Manulife for US$520m

Dharmala sues IFC and Manulife for US$520m

Bloomberg, Jakarta

International Finance Corp. and Manulife Financial Corp. are
being sued for US$520 million by Indonesia's Dharmala group over
claims they caused one of its units to fail, a move that may
delay repayment to its creditors.

Dharmala claims the World Bank's investments arm and the
Canadian insurer caused a cash crunch at its financial services
unit, PT Dharmala Sakti Sejahtera, contributing to its June 2000
bankruptcy. IFC, Manulife and Dharmala Sakti were partners in
insurance company PT Asuransi Jiwa Manulife (AJM).

"The lawsuit has no basis," said Chris Bendl, managing
director of Manulife's Indonesian unit. "It's all just to block
the disbursement of the creditors' fund."

Dharmala, a diversified company with interests from financial
services to property, accused IFC and Manulife of withholding a
Rp 195 billion dividend payment, 40 percent of which should have
been distributed to Dharmala Sakti to help the company repay
debt, said O.C. Kaligis, the group's lawyer.

"The bankruptcy damaged Dharmala's reputation and caused a
loss of potential income from the group's otherwise still viable
companies," Kaligis said.

The claim for Rp 5.2 trillion was filed in the Central Jakarta
Court.

The latest suit comes a month after the Indonesian attorney-
general rejected another claim against Manulife over who owns
AJM. The Canadian insurer paid Rp 170 billion for Dharmala's 40
percent stake in the venture on Oct. 26, 2000.

Roman Gold Assets Ltd., a British Virgin Islands-registered
company, claimed it bought the AJM shares from another company
before Manulife. That claim foundered on evidence it was based on
forged documents.