Dharmala to appeal London ruling

Dharmala to appeal London ruling

JAKARTA (JP): Publicly-listed investment holding firm PT Dharmala Sakti Sejahtera announced yesterday that it will appeal a London court's ruling on a US$69-million financial dispute between the company and Bankers Trust New York Corp.

Dharmala said in a statement that it noted with "deep regret" the decision of the English High Court of Justice in London, which ruled in favor of Bankers Trust.

"In this case, Dharmala Sakti will appeal to prove that this derivatives transaction represents problem sale practices conducted by Bankers Trust with its other customers," the statement said. "Dharmala will pursue any possible way in line with the existing law to seek justice."

Bankers Trust was sued by several clients after derivatives transactions went sour. Bankers Trust is currently in a legal battle with Procter & Gamble Co. Earlier this year, it settled a dispute with Gibson Greeting Inc.

Dharmala said the Central Jakarta District Court, the first court to handle the dispute, ruled in its favor on May 30. The court required Bankers Trust to pay it $1.7 million. The Jakarta High Court then reaffirmed the decision on Nov. 21.

Bankers Trust initiated its counter suit in mid-July.

In its letter to the directors of the Jakarta Stock Exchange, dated July 25, Dharmala said it acted as an arranger for PT Deemti Sakti Indo in a financial transaction with Bankers Trust valued at $50 million.

Dharmala said the dispute began when there were differences in financial calculations, which resulted from unclear information provided by Bankers Trust.

Dharmala contends that Bankers Trust misrepresented the terms of the derivatives contracts agreed to in early last year.

Dharmala said Bankers Trust once offered to settle the dispute by asking it to pay Bankers Trust $5 million. Dharmala rejected the offer, saying that based on its calculation, Bankers Trust had to pay $320,000 to Dharmala, "not the other way around."

However, as reported by Reuters, Bankers Trust said that it had not misled Dharmala and accused Dharmala of trying to escape from the contracts.

Dharmala assured yesterday that the London court ruling would have no financial impact on the company as it had merely acted as an intermediary in the disputed transaction.

Dharmala's loss has not affected its shares on the Jakarta Stock Exchange. Dharmala Sakti closed at Rp 1,200 yesterday, unchanged from Friday's close. (rid)